S&P ups IPC view to stable, rates loan B-

S&P said it revised its outlook on IPC Corp. to stable from negative and affirmed all its ratings on the company, including the B- corporate credit rating.

In addition, S&P said it assigned an issue-level rating of B- with a recovery rating of 3 to IPC's new $293 million first-lien term loan. The 3 recovery rating indicates an expectation for meaningful recovery (50-70%; rounded estimate of 60%) in the event of a payment default.

“The outlook revision reflects increased covenant cushion and improved liquidity position as a result of the recent amendment to the company's first lien maximum leverage covenant. Given the company's decent revenue visibility driven by recurring revenue of about 80% and a product backlog of $103 million (excludes subscription contracts) combined with the company's improved cost structure, and looser covenants, we believe the company will maintain covenant cushion of at least 15% over the next year,” S&P said in a news release.

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