S&P rates Riverbed loan B, notes CCC+

Standard & Poor’s said it assigned a preliminary B corporate credit rating to Riverbed Technology Inc.

The agency also said it assigned a preliminary B rating and 3 recovery rating to the company’s $1.525 billion first-lien term loan due 2022 and $100 million revolver due 2020.

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

S&P also assigned a preliminary CCC+ rating and 6 recovery rating to the company’s $625 million senior unsecured notes due 2023.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The outlook is stable.

The ratings reflect company’s fair business risk profile and highly leveraged financial risk profile, S&P said.

The ratings also consider Riverbed’s continued reliance on its flagship SteelHead product, which faces limited growth prospects in a maturing end market, the agency said.

The company’s strong position in the WAN optimization market, high contract renewal rates, diverse blue chip customer base and solid cash flow generation somewhat offset these risk factors, S&P said.

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