S&P ups Consolidated Communications loan recovery to 2

Standard & Poor's said it affirmed Consolidated Communications Holdings Inc.'s BB- $455 million secured credit facility and upgraded the recovery rating on the loan to 2 from 3. The company's other ratings, including the BB- corporate credit rating and B senior unsecured debt rating, were affirmed. The outlook is negative.

S&P said the ratings on Consolidated Communications reflects an aggressive, shareholder-oriented financial policy with a commitment to a substantial dividend that limits potential debt reduction; flat-to-declining revenues from its mature local telephone business; modest integration risk related to its April 2004 acquisition of TXU Communications Ventures and an aggressively levered financial profile. Debt to EBITDA was 4.2x at the end of 2005.

Tempering factors include growth potential from data services and Internet Protocol TV, which was launched commercially in several Illinois markets in 2005, and a supportive regulatory environment.

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