S&P rates Syniverse, loans B-

S&P said it assigned Syniverse Corp. and its planned $150 million senior secured revolver due 2027 and $1.025 billion first-lien term loan due 2029. The 3 recovery rating indicates an expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in default. The loans will be borrowed through Syniverse Holdings LLC.

Syniverse plans to recapitalize with the new debt, $750 million of common equity from Twilio Inc., which remains a strategic partner, and $315 million of new preferred equity.

“We expect the revised transaction to result in more modest debt reduction than was contemplated from the previously proposed special purpose acquisition company (SPAC) merger. As a result, we expect S&P Global Ratings-adjusted debt to EBITDA to be in the high-6x area in 2022, declining to the mid-6x area in 2023,” S&P said in a press release.

The agency also withdrew the issuer credit rating on Syniverse Holdings Inc. to be renamed to Syniverse Holdings LLC before close.

The outlook is stable.

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