S&P gives B+ to Mitel loan

Standard & Poor's said it assigned its B+ issue-level rating and 2 recovery rating to Mitel US Holdings Inc.'s proposed $355 million term loan due 2020.

The 2 recovery rating indicates an expectation of substantial (70%-90%) recovery in the event of default.

The B long-term corporate credit rating on parent Mitel Networks Corp. is unchanged.

The outlook is positive.

As part of its previously announced acquisition of Aastra, Mitel plans to refinance its existing credit facilities with a new first-lien credit facility composed of a $355 million term loan B and $50 million revolver (S&P does not rate the revolver). Mitel's total debt will increase by about $80 million, but leverage will decline because the Aastra acquisition is largely equity-financed.

"The ratings on Mitel reflect our assessment of the company's vulnerable business risk profile, significant financial risk profile, and adequate liquidity position," S&P credit analyst David Fisher said in a news release.

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