Moody’s could drop ViaWest

Moody's Investors Service said it placed ViaWest, Inc.'s B2 corporate family rating, B2-PD probability of default rating, B2 senior secured revolving credit facility rating and sister company Shaw Data Centre LP's B2 senior secured term loan rating on review for downgrade following the June 13 announcement of a share purchase agreement with an affiliate of Peak 10, Inc. (B3, stable), that would see Peak 10 acquire ViaWest from Shaw Communications Inc. (Baa3, positive).

The action was prompted by the potential that a substantial portion of the roughly $1.7 billion purchase price would be debt financed, with ViaWest becoming part of a more highly levered entity. ViaWest's (Moody's adjusted debt/EBITDA is 5.3 times (Feb. 28) while Peak 10's is 6.8 times (March 31).

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