Research Update: U.S.-Based IPC Corp. Downgraded To 'CCC' From 'CCC+', Outlook Negative

Global trading communication systems, compliance solutions, and network services provider IPC Corp.'s debt burden remains elevated relative to its earnings base with S&P Global Ratings-adjusted leverage of 9.8x for the 12 months ended June 30, 2020. Despite the recent stabilization in its earnings trends, we believe the company's ability to reduce its leverage to more sustainable levels is limited by its current capital structure as well as secular pressure that will be difficult to offset with growth in new services or cost reductions. Therefore, we are lowering all of our ratings on IPC by one notch to 'CCC' from 'CCC+', including our issuer credit rating, because we believe the timeframe for a distressed exchange or bankruptcy filing is now within

...- Global trading communication systems, compliance solutions, and network services provider IPC Corp.'s debt burden remains elevated relative to its earnings base with S&P Global Ratings-adjusted leverage of 9.8x for the 12 months ended June 30, 2020. - Despite the recent stabilization in its earnings trends, we believe the company's ability to reduce its leverage to more sustainable levels is limited by its current capital structure as well as secular pressure that will be difficult to offset with growth in new services or cost reductions. - Therefore, we are lowering all of our ratings on IPC by one notch to '###' from '###+', including our issuer credit rating, because we believe the timeframe for a distressed exchange or bankruptcy filing is now within a year given its August 2021 debt maturities. - The negative outlook reflects the potential that we will lower our rating if we believe a default is likely in the next six months....

Research Update