S&P puts CommScope on negative watch

S&P said it placed its ratings on CommScope Holding Co Inc. on CreditWatch with negative implications, including the BB- issuer credit rating.

The CreditWatch action follows CommScope's announcement that ARRIS International’s revenue fell 12.4% from the prior year, and that EBITDA fell 58.9% to $85.9 million, due to a reduction in capital spending by certain large North American network operators, a channel inventory draw-down, and the impact of transition production out of China due to tariffs.

“We think this weak performance could preclude the company from reducing leverage to less than 5x within the next 12 to 24 months, which is required to support the BB- rating,” S&P said in a news release.

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