S&P assigns U.S. Cellular notes BB

S&P said it assigned its BB issue-level rating and 3 recovery rating to United States Cellular Corp.'s proposed senior notes (amount and maturity to be determined). The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in default. U.S. Cellular is a wholly-owned subsidiary of Telephone and Data Systems Inc.

S&P rates U.S. Cellular’s outstanding unsecured debt BB.

Proceeds are expected to be used to refinance debt, buy additional spectrum and fund capital expenditures.

“Despite the increase in debt, our issue-level and recovery ratings on U.S. Cellular remain unchanged because we expect it to use a portion of the proceeds to purchase spectrum licenses, the value of which we include in our default valuation,” S&P said in a press release.

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