S&P upgrades CommScope

Standard & Poor's said it raised the corporate credit ratings on CommScope Holding Co. Inc. and CommScope Inc. to BB- from B+.

The outlook is stable.

The agency also said it raised the ratings on the company's $1 billion first-lien term loan to BB+ from BB. The recovery rating on this debt is unchanged at 1, indicating 90% to 100%) expected default recovery.

The agency also said it raised the ratings on the company's $1.5 billion senior notes due 2019 to B+ from B. The recovery rating on this debt is unchanged at 5, indicating 10% to 30% expected default recovery.

S&P also raised the ratings on the company's $550 million holding company paid-in-kind toggle notes to B from B-. The recovery rating on this debt is unchanged at 6, indicating 0% to 10% expected default recovery.

The upgrade follows CommScope's successful execution of an initial public offering and significant debt repayment, the agency said.

The company received net primary proceeds of $437.3 million from its IPO, which it used to repay $399 million of its existing $1.5 billion senior notes due 2019, S&P said.

"The IPO alters our view that sustained deleveraging is unlikely, given the reduced private equity ownership and broader oversight and fiduciary responsibility as a public firm," said Al Bonfantini, an S&P analyst.

Furthermore, pro forma adjusted leverage is now about 4x, down from about 4.7 x as of June 30, the agency said, and leverage is expected to remain at about 4x over the near term.

The ratings reflect the company's fair business risk profile and aggressive financial risk profile, S&P added.

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