S&P pares Syniverse

S&P said it lowered its ratings on Syniverse Corp. and its first-lien term loan to CCC+ from B-. The recovery rating remains 3, reflecting meaningful (50%-70%; rounded estimate: 60%) recovery in default.

“The downgrade of the company reflects our view that its capital structure is currently unsustainable given its high leverage. We expect Syniverse's adjusted leverage will exceed 9x in both 2023 and 2024. We had previously expected 2024 leverage to decline to the high-6x area, but that appears increasingly unlikely since we expect its EBITDA growth to remain weak through 2024.

“The company continues to record FOCF deficits while its adjusted debt increases due to borrowings under the revolving credit facility and the elevated payment-in-kind (PIK) rate on its preferred instrument, which we include in our adjusted debt calculation,” S&P said in a statement.

The outlook is negative.

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