S&P rates A2Z Wireless, loan B

S&P said it assigned its B corporate credit rating to A2Z Wireless Holdings Inc. (A Wireless).

The outlook is stable.

At the same time, the agency assigned a B issue-level ratings and 3 recovery rating to the company's $510 million first-lien term loan due 2023. The 3 recovery rating reflects an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. S&P does not rate the $70 million ABL revolver due 2022. The borrower of the debt is LSF9 Atlantis Holdings LLC.

"The ratings reflect our assessment of A Wireless' good position in a narrow market, its dependence on a sole broadband provider (Verizon) for its mobile revenue, the inherent execution risks we associate with its recent rapid growth, and the aggressive financial policy we anticipate it will pursue, given its private equity sponsor ownership," S&P credit analyst Adam Melvin said in a news release.

"Further, given that the company's operating performance is closely related to customer acceptance of Verizon plans and original equipment manufacturers (OEM) products, we believe the company is susceptible to product cycles that may affect cash flows and profitability."

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