S&P lifts Conexant, rates note B+

Standard & Poor's said it assigned a B+ rating with a recovery rating of 1 to Conexant Systems Inc.'s proposed $250 million senior secured floating-rate notes due 2010 and upgraded the company's corporate credit rating to B from B- and subordinated debt rating to CCC+ from CCC.

The outlook was revised to stable from negative.

Proceeds from the notes, along with cash on hand, will be used to refinance $457 million of debt maturing in February.

The agency said the ratings reflect volatile and competitive industry conditions, the mature nature of its core modem business and still-high leverage. Pro forma for the refinancing transaction, debt to annualized June-quarter EBITDA will be about 6x.

These factors are offset by Conexant's good positions in its key markets and its solid improvement over last year's revenue declines and operating losses. Conexant's June revenues were up 4% sequentially, to $251 million, and the set-top business is experiencing strongest gains, now over 30% of sales, because of demand from key customers Motorola and DirectTV, as they expand their markets and service offerings. The company is improving profitability through more efficient production and a stable pricing environment, S&P said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.