S&P changes Xperi view

S&P said it revised its outlook on Xperi Corp. to stable from negative and affirmed the BB- corporate credit rating.

At the same time, the agency affirmed the BB- issue-level rating with a 3 recovery rating on the company's $494 million senior secured term loan, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of payment default.

S&P said the revision reflects improved credit metrics, with adjusted gross leverage in the 3 times area due to the company's settlement with Broadcom and $100 million in debt paydown.

“Although the Samsung lawsuit is still ongoing, we project that leverage will fall to the high-2x area over the next 12 months, given our projection of around $425 million in billings in 2018, about $35 million in litigation expenses and stable operating expenses,” the agency said in a news release.

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