Moody’s could cut CommScope

Moody's Investors Service said it placed CommScope Holding Co., Inc.'s B1 corporate family rating under review for downgrade after the company announced it is planning to purchase a portion of TE Connectivity's network solutions business unit for $3 billion with a combination of cash and up to $3 billion in debt.

The transaction is expected to close in the second half of 2015.

CommScope is planning to purchase certain telecom, enterprise and wireless businesses from TE Connectivity for about $3 billion, funded with a combination of cash on hand and new debt. The purchase price could be funded with up to $3 billion in debt, though Moody's expects CommScope to use a portion of its sizeable cash balances to fund the transaction.

Leverage could exceed 5 times at closing of the transaction, up from well under 4 times as of September 2014. The review will focus on the final capital structure and the expected operating and financial performance of the combined entities, Moody’s said.

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