Moody’s: Consolidated Communications loan Ba3

Moody's Investors Service said it assigned a Ba3 rating to Consolidated Communications, Inc.'s proposed $935 million term loan B.

On Dec. 5, Consolidated agreed to acquire FairPoint Communications Inc. in an all-stock transaction valued at about $1.5 billion, including FairPoint's existing debt.

Proceeds from the term loan will be used to repay debt at FairPoint and pay transaction-related fees and expenses.

The outlook remains stable.

Moody’s said the B1 corporate family rating reflects Consolidated’s strong EBITDA margins in the mid 40% range (including dividends received from its wireless investments), good cash flow (prior to dividend payments and capex spend) and the company's track record of successfully integrating prior acquisitions.

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