S&P rates Horizon notes CCC

Standard & Poor's said it assigned its CCC rating to Horizon PCS Escrow Co.'s $125 million senior unsecured note issue and its CCC+ corporate credit rating to Horizon, as well as its parent, Horizon PCS Inc.

The outlook is negative.

S&P said the rating reflects the company's high degree of business risk, which includes reliance on Sprint PCS, its weak position in the highly competitive wireless segment, lack of wireless license ownership, aggressive leverage and limited liquidity.

Factors partially mitigating weak business risk include benefits of affiliation with a national wireless carrier and a potential increase in roaming minutes from Sprint PCS's wholesaling of services to wireless subscribers of Qwest Corp., Virgin Atlantic, and AT&T Corp., S&P said.

The rating also reflects Horizon's high financial risk. Excluding restructuring charges, debt to EBITDA is expected to be about 5.5x for 2004, adjusted for operating leases.

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