S&P cuts WaveDivision, notes

Standard & Poor's said it lowered its corporate credit rating on WaveDivision Holdings LLC to B from B+.

The outlook is stable.

At the same time, the agency lowered the issue-level ratings on WaveDivision's senior unsecured notes due 2020 to CCC+ from B-. This includes the company's proposed $125 million tack-on to the existing senior unsecured notes, proceeds of which will be used to fund its capital expenditures, including fiber to the tower builds, as well as potential acquisitions.

S&P also lowered the issue-level ratings on the company's senior unsecured PIK toggle notes due 2019 to CCC+ from B-.

The recovery rating on these debt issues remains 6, which indicates an expectation for negligible (0%-10%) recovery in the event of payment default.

In addition, the agency affirmed the BB- rating on WaveDivision's senior secured debt and revised the recovery rating to 1 from 2. The 1 recovery rating indicates an expectation for very high (90%-100%) recovery in the event of a payment default. S&P increased our default valuation based on contributions from recent acquisitions. The increase in unsecured debt provides secured creditors with additional cushion in our hypothetical default scenario.

"The downgrade reflects our view that credit metrics, pro forma for the transaction, did not support the previous rating," S&P credit analyst Eric Nietsch said in a news release. "We expect that pro forma debt to EBITDA will increase to around 7.5x from 6.7x at year-end 2014."

© 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.