S&P lifts Rovi, rates TiVo BB-

S&P said it removed all of the ratings on Rovi Corp. from CreditWatch with positive implications, where they were placed in May 2016.

The outlook is stable.

The agency also said it raised the corporate credit rating on Rovi to BB- from B+ and the rating on the company's wholly owned subsidiary Rovi Guides Inc.'s term loan B facility to BB+ from BB. The 1 recovery rating on the debt is unchanged, indicating 90% to 100% expected default recovery.

S&P said it subsequently withdrew the corporate credit rating on Rovi and assigned a BB- corporate credit rating to TiVo Corp., Rovi's parent.

The outlook on TiVo is stable.

Rovi recently completed the acquisition of TiVo Inc. in September 2016 and will be doing business as TiVo Corp., S&P explained.

Post acquisition, the agency said it expect TiVo's adjusted leverage to be in the high-2x range in 2017 due to the incremental EBITDA and cash flow being added with no additional debt.

The ratings reflect a view that an alignment of the corporate credit rating to the ultimate parent entity, TiVo, better represents the company's credit profile, S&P said.

The upgrade reflects TiVo's significantly improved leverage and cash flow following Rovi's acquisition of the company, which was fully financed by a combination of new equity issued and cash on hand, the agency said.

The ratings also consider TiVo’s established brand name, large portfolio of patents, strong contractual profile and limited revenue and product diversification, S&P said.

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