S&P drops Primus Telecom

Standard & Poor's said it lowered its ratings Primus Telecommunications Group Inc. and related entities, including the senior unsecured debt and subordinated debt ratings to CCC- from CCC and the corporate credit rating, which was lowered to CCC+ from B-.

The ratings were removed from CreditWatch, where they were placed on May 5, following the company's first-quarter 2005 earnings announcement, which included reported EBITDA that were less than expected by S&P, the agency said.

The outlook is negative.

The downgrade reflects the agency's assessment of Primus' heightened business risk and higher uncertainty about the accompanying level of EBITDA the company will be able to achieve in 2005.

There is a high degree of volatility in EBITDA and substantial loss of investor confidence in the company, as exhibited by significant declines in the company's bond prices since its first-quarter earnings announcement May 2, S&P noted.

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