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S&P upgrades Brocade
Standard & Poor's said it raised the corporate credit rating on Brocade Communications Systems Inc. to BB+ from BB.
The outlook is stable.
The agency also said it raised the rating on the company's $300 million senior secured notes due Jan. 15, 2018 to BBB from BBB-.
S&P also raised the rating on the $300 million senior secured notes due Jan. 15, 2020 to BBB from BBB-.
The 1 recovery rating on all the senior secured notes remains unchanged and indicates 90% to 100% expected recovery in a default.
The upgrade reflects Brocade's improved credit profile through continued debt reductions during the past year, S&P said, as well as an expectation that the company will maintain its intermediate financial risk profile.
Macro headwinds and industry conditions are likely to limit revenue growth in fiscal 2012, but the agency said it expects consistent cash flow generation resulting in sustained adjusted leverage in the 2x range or somewhat below.
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