Moody's lowers Clearwire

Moody's Investors Service said it lowered Clearwire Communications LLC's corporate family rating to Caa2 from Caa1, probability of default rating to Caa3 from Caa2, $2.7 billion senior secured first-lien notes due 2015 to B3 (LGD2, 17%) from B2 (LGD2, 17%) and $500 million senior secured second-lien notes due 2017 to Caa3 (LGD4, 54%) from Caa2 (LGD4, 50%).

The outlook is negative.

The downgrade reflects a view that Clearwire's relationship with Sprint appears unlikely to improve to the point where Sprint would extend their existing wholesale agreement beyond 2013, Moody's said.

Consequently, Clearwire will need to find alternative wholesale partners or sell spectrum in order to make interest payments after 2012, the agency said.

The negative outlook is based on the company's weakening liquidity position and doubts about its ability to find a new wholesale partner in the near term.

Clearwire's SGL-4 speculative-grade liquidity rating is unchanged, and it reflects the company's cash burn rate, lack of a revolving credit facility and its inevitable need for new capital, Moody's added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.