Research Update: CommScope Holding Co. Inc. Outlook Revised To Negative On Worsening Credit Metics From Weaker Demand; Ratings Affirmed

CommScope Holding Co. Inc., a provider of network infrastructure products, has seen weak customer demand from a large inventory overhang and tougher macroeconomic environment. Due to these headwinds, we expect CommScope to see elevated leverage and limited free operating cash flow (FOCF) generation after mandatory debt amortization payments in 2023 and 2024. Therefore, we revised our outlook on CommScope to negative from stable and affirmed our 'B-' issuer credit rating. We also affirmed our 'B' issue-level and '2' recovery rating on CommScope's secured debt and our 'CCC+' issue-level rating and '5' recovery rating on its unsecured debt. The negative outlook reflects our expectation that CommScope's leverage will be elevated above the 9x area and FOCF generation will be limited after

...- CommScope Holding Co. Inc., a provider of network infrastructure products, has seen weak customer demand from a large inventory overhang and tougher macroeconomic environment. - Due to these headwinds, we expect CommScope to see elevated leverage and limited free operating cash flow (FOCF) generation after mandatory debt amortization payments in 2023 and 2024. - Therefore, we revised our outlook on CommScope to negative from stable and affirmed our 'B-' issuer credit rating. - We also affirmed our 'B' issue-level and '2' recovery rating on CommScope's secured debt and our '###+' issue-level rating and '5' recovery rating on its unsecured debt. - The negative outlook reflects our expectation that CommScope's leverage will be elevated above the 9x area and FOCF generation will be limited after debt amortization payments in 2023 and 2024 on weaker demand from a tougher macroeconomic environment and prolonged inventory overhang. We expect CommScope will address the 2025 maturing unsecured...

Research Update