S&P rates MaxLinear

S&P said it assigned a BB- corporate credit rating to MaxLinear Inc.

The outlook is stable.

The agency also said it assigned a BB- rating and 3 recovery rating to MaxLinear's $425 million senior secured term loan.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The BB- rating reflects MaxLinear's very high degree of customer concentration, limited scale and a highly acquisitive growth strategy focused on expanding into infrastructure applications, S&P said.

The agency said it calculated pro forma leverage for 2016 of 3.2x on a fully adjusted basis.

That leverage is expected to increase modestly to about 3.4x over the course of 2017 on near-term revenue and EBITDA declines at MaxLinear, S&P added, before declining to the 2x range in 2018.

Low capital intensity, good profitability and a track record of steady growth in core home connectivity products are credit strengths, the agency said.

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