S&P rates Mitel Networks loan B+

Standard & Poor’s said it assigned its B+ issue-level rating and 3 recovery rating to Mitel Networks Corp.’s proposed $650 million first-lien term loan B due 2022. The 3 recovery rating indicates an expectation for meaningful (50%-70%) recovery in the event of a default.

Proceeds of the term loan, which will be issued by Mitel U.S. Holdings Inc. (a wholly owned subsidiary of Mitel), will be used to fund the acquisition of Mavenir Systems Inc. and refinance Mitel’s existing debt. The company is also entering into a new $50 million revolver.

S&P’s B+ long-term corporate credit rating and stable outlook on Mitel are unchanged.

S&P said the ratings on Mitel are based on a “weak” business risk profile and “significant” financial risk profile assessments on the company, as well as S&P’s use of the comparable rating analysis modifier to reduce the rating by one notch below the bb- anchor.

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