S&P ups McAfee

S&P said it upgraded the ratings on McAfee Corp. and its term loans to BB from BB-. The debt’s recovery rating is unchanged at 3. The agency also removed the issuer rating from CreditWatch, where S&P placed it with positive implications on March 8.

“Debt reduction of $1 billion more than offsets an EBITDA loss from the enterprise business, driving leverage under 4x.McAfee has used $1 billion of the $4 billion total proceeds from the sale of its enterprise security business, bringing the remaining debt balance down to just under $3 billion. This debt paydown, combined with strong consumer growth, will more than offset the loss of the enterprise security business' approximately $330 million of EBITDA from this divestiture to bring down leverage to approximately 3.5x by the end of 2021, by our calculation,” S&P said in a press release.

The agency also noted McAfee’s consumer security business continues to report strong growth, with four consecutive quarters of more than 20% year-over-year sales growth and double-digit customer adds.

The outlook is stable.

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