S&P rates Hawaiian Telecom loan B

Standard & Poor’s said it assigned a B rating and 3 recovery rating to Hawaiian Telcom Communications Inc.’s proposed $320 million senior secured term loan maturing in 2022.

The senior secured term loan is part of $350 million of credit facilities that includes an unrated $30 million revolver. The 3 recovery rating on the new senior secured term loan indicates 50% to 70% expected default recovery.

The proceeds will be used from the new facilities to repay $295 million outstanding under the existing term loan and add cash to the balance sheet, S&P said.

The B corporate credit rating and stable outlook on Hawaiian Telcom Holdco Inc. is unchanged.

Pro forma for the transaction, the agency said it expects leverage to increase modestly to the mid-3x range from a previous forecast of 3.2x for year-end 2015, S&P said.

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