Fitch cuts LCPR debt recovery

Fitch Ratings said it lowered the recovery ratings on Liberty Communications of Puerto Rico LLC’s revolver, LCPR Loan Financing LLC's 2028 term loan, and LCPR Senior Secured Financing DAC’s 2027 and 2029 senior secured notes to RR2 from RR1. The agency also affirmed their BB+ ratings and the BB- issuer rating but changed the company’s outlook to negative from stable.

“The instrument ratings reflect Fitch's approach to recovery ratings under its corporate recovery ratings and instrument ratings criteria. Secured debt ratings of BB+ incorporate collateral support included in the transaction structure. The instruments qualify as category 2 first-lien with an RR2 and a two-notch uplift from LCPR's IDR,” the agency said in a press release.

The weaker outlook reflects the opinion that net leverage could remain elevated given the competition in Puerto Rico's mobile market and limited growth prospects of the island's fixed market, which could lead to stagnant to declining average revenue per user. “Absent some combination of sound EBITDA recovery and debt reduction, a ratings downgrade could occur,” Fitch warned.

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