S&P puts Stratos Global on watch

Standard & Poor's said it placed its BB- long-term corporate credit rating on Stratos Global Corp. on CreditWatch with negative implications.

The CreditWatch placement follows Stratos Global's announced preliminary agreement to acquire 100% of the shares of Xantic BV for about $191 million. The transaction will be 100% debt financed through fully committed facilities and is expected to close within six months subject to regulatory and other relevant approvals.

S&P said the CreditWatch placement on Stratos reflects a weakened financial risk profile of the company due to the expected increase in debt to Stratos' balance sheet. The acquisition is expected to increase lease-adjusted leverage (debt to EBITDA) from its current level of 3.6x for the 12 months ended June 30 to more than 5x on a pro forma basis.

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