Moody's rates Grande Communications

Moody's Investors Service said it assigned a Caa2 rating for the recently completed $136 million offering of 14% senior secured notes by Grande Communications Holdings Inc. and downgraded the senior implied rating to Caa2 from Caa1 and the issuer rating to Ca from Caa2.

The outlook is stable.

Moody's said the ratings for Grande broadly incorporate the company's high perceived financial and business risk.

The ratings benefit, however, from the company's technologically advanced network, which is capable of delivering a full bundle of services including video, telephony and high speed internet access; sufficient capacity on the network to deliver a wide range of incremental services going forward; opportunistic market share grabs at some level as the company expands into higher demographic areas with its new build program; and the prospect of growing ARPU and EBITDA per subscriber as RGUs grow and the company increases the number services taken by each incremental subscriber.

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