S&P: TeleGuam loans BB-, B-

S&P said it assigned a B+ corporate credit rating to AP TeleGuam Holdings Inc.

The outlook is stable.

The agency also said it assigned a BB- rating and 2 recovery rating to the company's proposed senior secured first lien credit facilities, which consist of a $15 million revolving credit facility due 2022 and $130 million first-lien term loan due 2023.

The 2 recovery rating indicates 70% to 90% expected default recovery.

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

TeleGuam will use the $155 million of net proceeds, along with equity invested from the acquirer to fund the purchase price of the acquisition and pay associated transaction fees.

The borrower of the debt is TeleGuam Holdings LLC, a wholly owned subsidiary of AP TeleGuam Holdings.

TeleGuam Holdings is being acquired by Huntsman Family Investments and its affiliates for an undisclosed amount, the agency said.

The ratings reflect the company’s relatively small scale and geographic limitations as a leading provider of telecommunications services on the island of Guam, S&P said.

The ratings also consider an expectation that pro forma for the proposed transaction, adjusted leverage will be in the mid-4x range in 2017, the agency said.

TeleGuam's small size and geographic concentration is partly offset by its strong market position and solid product diversity as a provider of quad-play service, S&P said.

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