S&P rates Grande Communications

Standard & Poor's said it assigned its CCC+ corporate credit rating to Grande Communications Holdings Inc. and assigned its CCC rating to the company's $125 million senior unsecured notes due 2014. The notes are guaranteed on a senior unsecured basis by all of the company's restricted subsidiaries, which represent the company's operating subsidiaries.

The outlook is developing.

S&P said the rating reflects the high degree of business risk facing the company as an integrated telecommunications and cable TV provider operating as an over-builder to the existing incumbent cable operator and a competitive local exchange carrier entity competing primarily with integrated telephone provider SBC Communications Inc.

In most of the company's six Texas markets, Time Warner Cable is the incumbent cable provider. Grande has been able to achieve customer penetration of marketable homes and small businesses. However, further gains could be stifled if Time Warner becomes more aggressive in its win-back efforts, or if these properties are ever sold to another cable operator, the agency said.

S&P said the company's ability to continue to grow related services, such as consumer broadband and telephony, would likewise be adversely affected by more aggressive marketing and customer service efforts by the incumbent local telephone companies serving these areas. SBC also represents a formidable competitor, given its large scale and substantial financial resources.

Despite these challenges, S&P noted the company has been able to establish a combined customer base of about 103,000 cable TV and telephony subscribers. It has also been successful in selling bundled services to its cable customers through significant discounting relative to the incumbent telephone and cable TV providers. The vast majority of cable subscribers take at least two services.

© 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.