Moody's rates Metrocall/Arch Wireless loan Ba3

Moody's Investors Service said it assigned a Ba3 senior implied rating to USA Mobility Inc. and a Ba3 rating to the proposed $140 million senior secured term loan due 2006 for Metrocall Inc. and Arch Wireless Operating Co. Inc. (as co-borrowers).

The outlook is stable.

Moody's also assigned USA Mobility an issuer rating of B2 and a speculative grade liquidity rating of SGL-2.

Moody's said the Ba3 ratings reflect the downward financial and operating trends that plague the paging industry as customers substitute cellular/PCS phones, PDAs and other wireless devices for pagers. The ratings also account for the quite modest financial leverage the company is taking on to complete its pending merger, the company's history of and commitment to rapidly repaying debt, strong interest coverage ratios, and robust free cash flows.

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