S&P rates Ntelos loan BB

Standard & Poor's said it assigned BB issue-level and 2 recovery ratings to Ntelos Inc.'s $125 million incremental term loan due 2015, affirmed the existing credit facility at BB with a recovery rating of 2 and affirmed the ratings on parent company Ntelos Holdings Corp., including the BB- corporate credit rating.

The outlook was revised to stable from positive.

The company will use proceeds from the incremental term loan, coupled with around $50 million of cash, to finance the purchase of the FiberNet assets from One Communications Corp. for $170 million. Pro forma for the financing of the FiberNet acquisition, S&P expects the adjusted debt-to-EBITDA ratio to be in the 3.5 times area.

The outlook revision reflects the agency's view that, at least in the near term, adjusted leverage is not likely to moderate to the high 2 times leverage metric cited in the prior positive outlook as supportive of an upgrade.

The rating recognizes Ntelos' limited scale and geographic diversity of its operations, the presence of formidable competitors in each of its operating segments and an aggressive financial risk profile, S&P said.

Mitigating business risk considerations include a well-managed but maturing regional wireless business and the degree of business diversity provided by the company's smaller wireline businesses, the agency said.

© 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.