S&P rates Orbcomm, loans B

S&P said it assigned B ratings to Orbcomm, Inc. and its planned $360 million first-lien term loan and $50 million revolving credit facility. The recovery rating on the loans is 3.

GI Partners is acquiring Orbcomm for about $1.1 billion, resulting in 2021 pro forma adjusted leverage rising to 5.6x from 4.3x at the end of 2020.

“The rating reflects Orbcomm's position as a small-scale provider of internet of things (IoT) solutions that could be vulnerable to increasing competition. Orbcomm operates in a niche–but growing--industry, targeting all transportation asset classes (road, sea, rail, and intermodal) through IoT offerings.

The outlook is stable. The outlook reflects the view adjusted leverage will remain below the agency’s 6x downgrade threshold, but private-equity ownership and longer-term competitive threats limit ratings upside, S&P said.

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