S&P lowers One Communications

Standard & Poor's said it lowered its corporate credit rating on One Communications Corp. to B- from B.

The agency said that the downgrade reflects limited covenant cushion under the company's bank credit facility, particularly the total leverage covenant, which steps down to 3.25x at the end of the third quarter of 2008.

Establishing adequate protection under the covenants may be challenging given current performance and the company will likely need to use its cash balance to pay down debt to maintain compliance, the agency added.

At the same time, S&P said it lowered its issue-level ratings on One Communications' senior secured term loan and revolver to CCC+ from B-.

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