S&P: Infoblox loans B-, CCC

S&P said it assigned a B- corporate credit rating to Delta Holdco LLC, the parent company of Infoblox Inc.

The agency also said it assigned a B- rating and 3 recovery rating to the company's $550 million first-lien credit facility consisting of a $50 million revolving credit facility due 2021 and a $500 million first-lien term loan due 2023. The 3 recovery indicates 50% to 70% expected default recovery.

S&P also said it assigned a CCC rating and 6 recovery rating to the company's $250 million second-lien term loan due 2024. The 6 recovery rating indicates 0 to 10% expected default recovery.

The borrowers on the debt are Infoblox and India Merger Sub Inc.

The outlook is stable.

The ratings reflect the small, fragmented and somewhat volatile network automation market, S&P said, which is partly offset by the company’s leading market position and maintenance retention rates in 90% range.

The stable outlook reflects an expectation that Infoblox will maintain its leadership position in the some of its segments and continue to increase some subscription-based offerings while generating positive free operating cash flow, the agency said.

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