S&P rates Net Servicos notes B+

Standard & Poor's said it assigned its B+ rating to the $76,593,068 of 7.0% senior secured notes due 2009 to be issued by Net Serviços de Comunicação SA (NET), the largest Brazilian provider of pay-TV services. NET's issuer global scale rating was revised to SD.

NET is offering to exchange the $76.6 million senior notes plus cash for its existing $97.7 million 12 5/8% senior guaranteed notes due 2004. The company is also soliciting consent for the proposed amendments to the indenture governing the 12 5/8% notes. Holders participating in the exchange offer will receive $784.03 principal amount of new notes; $522.68 of cash; and an additional amount of cash equal to simple interest accruing on $1,306.71 from July 1, 2004, through the day immediately prior to the date of the closing of the exchange offer at a rate equal to Libor plus 3% per year.

S&P said the SD global scale issuer rating on NET reflects the company's decision to suspend principal and interest payments on its debt in December 2002. The issuer rating will be maintained at SD until the exchange documents are formalized and creditors actually tender the defaulted credits into the new notes.

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