S&P upgrades Digi International

S&P said it raised Digi International Inc.’s rating to B+ from B and its senior secured debt to BB from B. The 1 recovery rating on the debt indicates very high (90%-100%; rounded estimate: 95%) recovery in default.

“Digi repaid about 30% of its debt in fiscal 2022, and we expect its leverage will continue improving from earnings growth and mandatory debt repayment. Digi repaid $100 million of its debt during fiscal 2022, reducing its S&P Global Ratings'-adjusted leverage to the low-3x area from about 5.2x as of Dec. 31, 2021, following its debt-financed acquisition of Ventus Global Network Solutions,” the agency said in a press release.

S&P said it forecasts Digi to deliver 7%-9% revenue and earnings growth in fiscal 2023.

The outlook is stable.

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