S&P puts Conversent on developing watch

Standard & Poor's said it placed Conversent Communication Inc.'s B corporate credit and bank loan ratings on CreditWatch with developing implications following the announcement that Conversent has signed a definitive agreement to be acquired by CTC Communications and Choice One Communications, which had announced an agreement to merge on Feb. 10.

Given the lack of information on merger terms and detailed financial disclosure by the acquiring companies and uncertainty about the financial profile and business strategy of the new entity, S&P said it is not clear whether the outcome of the transaction will be detrimental or beneficial to Conversent's overall credit profile.

The acquisition will be partially funded with an equity investment from Columbia Ventures Corp. (sole shareholder of CTC Communications) and an equity investment from existing Choice One shareholders.

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