S&P raises RPX secured debt to BB-

S&P said it raised its issue-level rating on RPX Corp.’s $20 million first-lien revolving credit facility due in 2023 and $240 million ($93 million outstanding) first-lien term loan due in 2024 to BB- from B+, and revised its recovery rating on the debt to 1 from 2.

The 1 recovery rating mirrors the agency’s expectation for very high (90%-100%; rounded estimate: 95%) recovery in its simulated default scenario. The raising of the issue-level rating follows the company prepaying nearly $110 million of the term loan on Dec. 18 with proceeds from the sale of its legal process outsourcing business, Inventus, for $150 million.

“We expect the company to use the remainder to pay a one-time dividend to its financial sponsor,” said S&P in a press release.

The agency’s B issuer credit rating on RPX is unchanged based on its view of the decreased business and end-market diversity, as well as heightened risk it may raise its leverage in the near-term given financial sponsor ownership and historically low post-transaction leverage.

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