CommScope Holding Co Inc. Ratings On CreditWatch Negative Following Weak Earnings And Guidance

On May 9, 2019, telecommunications equipment and components provider CommScope Holding Co Inc. announced weak earnings for ARRIS International and weak guidance for the combined company next quarter. We are placing our ratings on the company on CreditWatch with negative implications, including the 'BB-' issuer credit rating. We think this weak performance could preclude the company from reducing leverage to less than 5x within the next 12 to 24 months, which is required to support the 'BB-' rating. SAN FRANCISCO (S&P Global Ratings) May 10, 2019—S&P Global Ratings today took the rating actions listed above. The CreditWatch action follows CommScope's announcement that ARRIS' revenue fell 12.4% from the prior year, and that EBITDA fell 58.9% to $85.9 million, due to

...May 10, 2019 - On May 9, 2019, telecommunications equipment and components provider CommScope Holding Co Inc. announced weak earnings for ARRIS International and weak guidance for the combined company next quarter. - We are placing our ratings on the company on CreditWatch with negative implications, including the '##-' issuer credit rating. - We think this weak performance could preclude the company from reducing leverage to less than 5x within the next 12 to 24 months, which is required to support the '##-' rating. SAN FRANCISCO (S&P Global Ratings) May 10, 2019--S&P Global Ratings today took the rating actions listed above. The CreditWatch action follows CommScope's announcement that ARRIS' revenue fell 12.4% from the prior year, and that EBITDA fell 58.9% to $85.9 million, due to a reduction in capital spending by certain large North American network operators, a channel inventory draw-down, and the impact of transition production out of China due to tariffs. We estimate that pro forma...

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