S&P trims Mitel

S&P said it lowered its ratings on Mitel Networks (International) Ltd. to CCC from CCC+, its first-lien secured debt to CCC from CCC+ and its second-lien debt to CC from CCC-. The recovery ratings on the debt are unchanged at 3 and 6, respectively.

The agency said it no longer expects Mitel to repay the $250 million of debt in 2023 with proceeds of RingCentral equity due to market volatility.

“In addition, the migration of customers to the RingCentral platform is modestly slower than expected, and as such we do not anticipate any meaningful EBITDA until the second half of 2022. As a result, we project Mitel's debt leverage measures will remain elevated above 10x, while ongoing investments will likely stress liquidity in 2023,” S&P said in a press release.

Furthermore, the agency said it estimates Mitel reporting operational losses in 2023, which would be mostly funded by its $90 million revolver due November 2023.

The outlook is negative.

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