Moody's ups Rovi loans to Baa3

Moody's Investors Service said it revised Rovi Corp.'s outlook to positive from stable and upgraded the senior secured term loan to Baa3 (LGD2, 15%) from Ba1 (LGD2, 20%).

The agency affirmed Rovi's Ba3 corporate family and probability-of-default ratings, and speculative-grade liquidity rating at SGL-2.

The change in outlook reflects Rovi's improved credit metrics following substantial debt repayments over the past 12 months, and expectations of continued modest growth in revenues and profitability, and strong free cash flow generation, according to the agency.

The upgrade of the senior secured term loan to Baa3 reflects the reduced proportion of secured term loan borrowings in Rovi's capital structure following the repayment of an additional $50 million of the facility, Moody's said.

The Ba3 corporate family rating is driven by Rovi's solid recurring revenues from the licensing of its strong portfolio of patents spanning copy protection and interactive program guides, the agency said.

As of Dec. 31, the company's adjusted debt-to-EBITDA ratio was 2.5x.

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