S&P provides BB+ to VeriSign notes

S&P said it assigned a BB+ issue rating and 3 recovery rating to VeriSign Inc.'s proposed $450 million senior unsecured notes. The 3 recovery rating indicates an expectation for meaningful (50% to 70%; rounded estimate: 65%) recovery of principal in the event of a default.

VeriSign will use the proceeds for general corporate purposes.

The company’s BB+ corporate credit rating and the BB+ issue-level rating on its existing notes are unchanged.

The outlook remains stable.

S&P said its view of VeriSign’s financial risk profile reflects S&P-adjusted leverage in the high 3 times area following the proposed debt issuance. The leverage is in line with leverage following the previous unsecured notes issuance in 2015.

VeriSign has a stable recurring revenue business, and the agency projects the company to generate free cash flow of about $600 million over the next 12 months.

VeriSign has used all of its free cash flow on share repurchases over the past three years, and S&P added that it projects the company to follow a similar share buyback strategy over the next 12 months.

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