S&P gives Axtel notes BB

S&P said it assigned a BB issue-level rating to Axtel SAB de CV's (BB/negative/--) proposed $500 million senior unsecured notes due 2024.

At the same time, the agency assigned a recovery rating of 3 to the notes, indicating an expectation for a meaningful (50% to 70%) recovery in the event of a payment default.

“We view the transaction to have no impact on the company's existing debt level because Axtel plans to use the proceeds to partially prepay its syndicated term loan,” S&P said in a news release.

“The company also plans to use about $35 million from the proceeds from the sale of its 142 towers to American Tower to pay down an additional amount of the syndicated facility.”

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