S&P lowers IPC to stable, rates loan B-

Standard & Poor's said it revised the outlook on IPC Systems Inc. to stable from positive.

The agency also affirmed its B- corporate credit rating.

S&P also assigned a B- rating and 3 recovery rating to the company's proposed $230 million first-lien term loan.

The agency said it assumes the new term loan will mature in 2017, although the maturity would be accelerated to 2015 if the majority of the company's second-lien term loan is not refinanced beforehand.

The proceeds will be used to refinance about $187 million of tranche B-1 term loans and about £22.4 million of tranche B-2 term loans due 2014.

The 3 recovery rating indicates 50% to 70% expected recovery in a default.

S&P said it rates IPC's revolving credit facility and its existing first-lien term loan the same as the proposed first-lien term loan at B- with a recovery rating of 3.

The second-lien term loan is rated CCC with a recovery rating of 6, indicating 0% to 10% expected recovery.

The outlook revision reflects a view that IPC will be unable to reduce leverage to levels sufficient for an upgrade because of the difficult operating environment facing most of its customers, S&P said.

The company has experienced a meaningful decline in bookings of new trading systems, causing a reduced backlog of installations for IPC during the 2012 fiscal year, the agency said.

The company's high customer concentration and niche focus on the financial services industry leaves it susceptible to sudden drops in demand, S&P added.

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