Moody's rates Consolidated Communications loan B1

Moody's Investors Service said it assigned a B1 rating to Consolidated Communications Acquisition Texas Inc.'s (CCAT) and Consolidated Communications Inc.'s $390 million senior secured term loan.

At the same time, Moody's affirmed the B1 rating on CCAT's and Consolidated Communications Inc.'s existing senior secured term loans and revolving credit facility as well as Consolidated Communications Texas Holdings Inc.'s (CCTH) B1 senior implied rating and SGL-2 liquidity rating and the B3 rating on CCTH's and Consolidated Communications Illinois Holdings Inc.'s senior unsecured notes.

Moody's has changed the outlook on all ratings to stable from negative.

Moody's said the ratings reflect Consolidated's high leverage, vulnerability to heightened wireless or cable telephony competition in its rural markets, and its relatively flat top-line growth prospects and limited post-dividend free cash flow. Stable and dependable operating cash flow, a favorable regulatory environment, barriers to competitive entry, and a shift in the company's capital structure, subsequent to the planned IPO, to one with a higher equity weighting, support the ratings.

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