Moody's rates Airvana loan B3

Moody's Investors Service said it assigned a first-time B3 corporate family rating and a B3 probability of default rating to Airvana Network Solutions Inc.

Moody's also assigned a B3 (LGD 4, 50%) rating to the company's new $420 million senior secured term loan. The company plans to use the borrowings to refinance currently outstanding debt, fund a shareholder dividend and pay the associated premiums and fees.

The outlook is stable.

The ratings reflect the dual nature of the company's strong position as the sole supplier of critical software that enables data communications on 3G wireless CDMA networks deployed by Ericsson AB in the United States and the near certain phase out of that 3G technology by the U.S. carriers over the next decade, Moody's said.

The ratings are tempered by the projected finance nature of the company's revenue stream over the next several years, which will be fully dependent on the orders from Ericsson, the agency said, and by extension major end users Verizon Wireless and Sprint Nextel.

Moody's said it is concerned that the company may not generate sufficient cash in the next four years to repay all of its debt obligations prior to maturity.

The ratings are supported by the company's very good liquidity, modest leverage and robust current free cash flow generation, driven by limited capital expenditure needs, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.