CommScope Holding Co. Inc. Outlook Revised To Negative As Macro Risks May Delay Customer Capital Spending

S&P Global Ratings has revised our macroeconomic forecasts in response to the impact of the COVID-19 pandemic, and now expects a global recession in 2020. We are revising our outlook on CommScope Holding Co. Inc. to negative from stable, reflecting the risk that a severe economic slowdown could cause customers to delay investments in 5G capacity and other capital spending projects, leading to a delayed recovery in EBITDA and leverage remaining in the high-7x area. Reliable free cash flow generation, a cash balance of nearly $600 million, and a lack of debt maturities before 2024 should support the firm's ability to service its debt over a period of near-term stress, and we are affirming CommScope's B corporate credit rating. NEW

...April 3, 2020 - S&P Global Ratings has revised our macroeconomic forecasts in response to the impact of the COVID-19 pandemic, and now expects a global recession in 2020. - We are revising our outlook on CommScope Holding Co. Inc. to negative from stable, reflecting the risk that a severe economic slowdown could cause customers to delay investments in 5G capacity and other capital spending projects, leading to a delayed recovery in EBITDA and leverage remaining in the high-7x area. - Reliable free cash flow generation, a cash balance of nearly $600 million, and a lack of debt maturities before 2024 should support the firm's ability to service its debt over a period of near-term stress, and we are affirming CommScope's B corporate credit rating. NEW YORK (S&P Global Ratings) April 3, 2020--S&P Global Ratings today took the rating actions listed above. Leverage is likely to remain over 7.5x absent growth in wireless carrier capital spending. CommScope's revenue and EBITDA declined in 2019...

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