S&P rates Goodman notes B+

Standard & Poor's said that it assigned a B+ corporate credit rating to Goodman Networks Inc. and a B+ issue-level rating and 4 recovery rating to the company's proposed $225 million of senior secured notes due 2018. The 4 recovery rating indicates the expectation of average (30% to 50%) recovery in the event of a payment default.

The outlook is stable.

The company intends to use the proceeds from the notes to consolidate equity ownership, repay existing debt and fund additional working capital needs.

The ratings on Goodman reflect very high customer concentration, participation in a competitive and fragmented industry, dependence on spending patterns by telecommunications carriers and an aggressive financial profile, the agency said.

Tempering factors include the expectation for double-digit revenue and EBITDA growth over the next few years, reflecting significant infrastructure spending by wireless carriers to support increased demand for data services and the considerable backlog and multiyear contracts with its key customers, the agency added.

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