S&P ups Integra Telecom

Standard & Poor's said it raised the corporate credit rating on Integra Telecom Inc. to B- from CCC+ and removed it from CreditWatch with positive implications, where it was placed on April 7. The agency also said it affirmed the CCC+ issue rating on subsidiary Integra Telecom Holdings Inc.'s senior secured notes issue and secured term loan facility, as well as the B+ issue rating on its $60 million revolving credit facility. The recovery ratings on the debt remained unchanged.

The upgrade reflects the removal of restrictive financial maintenance covenants with the recently completed refinancing of the company's term debt, S&P said.

The agency said it feels the cushion under the covenants in the prior bank loan was tight and it might have been difficult for the company to meet these thresholds on an ongoing basis, especially if Integra experiences execution missteps or accelerated churn.

The upgrade was predicated on the presumption that these covenants, which are considerably looser than those in the previous bank agreement, provide a minimum ongoing cushion of 15%, S&P said.

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