S&P rates Orbcomm notes B

S&P said it assigned a B corporate credit rating to Orbcomm Inc.

The outlook is stable.

The agency also said it assigned a B rating and 3 recovery rating to the company's proposed $250 million senior secured notes due 2024. The 3 recovery rating indicates 50% to 70% expected default recovery.

The rating reflects the company's limited size, operations in a fairly narrow telecommunications niche, some degree of revenue concentration with its top customers and the fragmented and competitive nature of the IoT market, S&P said.

These factors are somewhat offset by the company's comprehensive product portfolio, good revenue visibility provided by an installed base with multi-year contracts and solid market share in providing machine-to-machine (M2M) solutions, the agency said.

The company's pro forma adjusted leverage of mid-6x will decline to the mid-5x range in 2017, S&P said.

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