ADVERTISEMENT

Investing

CommScope Fails to Reach Debt Deal, Shares Tumble in Premarket

(Bloomberg) -- CommScope Holding Co. bonds and shares dropped Thursday after the company released weaker-than-expected third-quarter results and said it yet to reach debt refinancing or recapitalization agreement with a group of creditors.

Shares slumped as much as 32%, the most since February, to $4.76. A CommScope bond due in 2028 dropped 4.25 cents to 84 cents on the dollar, according to data provider Trace.

The telecommunications infrastructure company said in a Thursday filing that it had been negotiating with an ad-hoc group of bondholders to address debt due in 2025 and 2026 and was studying options for a broader refinancing of bonds maturing in subsequent years. Talks aren’t continuing with that group, though CommScope said it remains in “active and constructive” discussions with other creditors.

The firm added it’s “actively pursuing other alternatives available” to address upcoming maturities and cut leverage.

Bloomberg News reported last week that CommScope and some of its had entered into confidential talks. The company had $8 billion of long-term debt as of Sept. 30, according to the company’s quarterly report. 

CommScope reported third-quarter sales of $1.08 billion, compared with a Bloomberg-compiled estimate of $1.42 billion. It also posted an adjusted loss of 5 cents per share, versus expected earnings on that basis of 35 cents. S&P Global Ratings said in May it expected CommScope’s revenue to decline this year because of a “challenging macroeconomic environment and soft end-market demand.” 

©2024 Bloomberg L.P.