Moody's: CommScope outlook stable

Moody's Investor's Service said it changed CommScope Inc.'s outlook to stable from negative following completion of the company's recent capital market transactions.

The agency affirmed the Ba3 corporate family and probability-of-default ratings and revised the senior secured debt ratings to Ba2 (LGD3, 41%) from Ba3 (LGD3, 45%) as a result of the material change in capital structure.

The change includes issuance of new common equity and new convertible notes (unrated), induced conversion of existing convertible notes, loosening of financial covenants and the paydown of about $400 million of senior secured debt, the agency said.

CommScope's adjusted pro forma leverage as of the quarter ended March 31 is 3.1x but is likely to rise in subsequent quarters, Moody's said.

CommScope continues to face a challenging macroeconomic environment, and revenue and EBITDA are expected to remain below prior year levels through 2009, the agency said.

Rhe capital structure improvements, alleviation of near term covenant tightness and the company's ongoing cost reductions remove some of the primary pressures, the agency noted.

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