Fitch may cut Cincinnati Bell

Fitch Ratings said it placed Cincinnati Bell Inc.'s B+ issuer default rating on Rating Watch negative, along with its senior secured credit facility at BB+ with recovery rating of RR1, $792 million senior notes at BB-with recovery rating of RR3, $625 million senior subordinated notes at B with recovery rating of RR5 and $129 million convertible preferred stock at B- with recovery rating of RR6. The agency also placed on negative watch Cincinnati Bell Telephone's issuer default rating at B+ and its $208 million senior unsecured notes at BB+ with recovery rating of RR1.

The negative watch follows the company's decision to acquire privately held data center operator CyrusOne for about $525 million, Fitch said.

To finance the transaction, the company has obtained commitments for a $970 million senior secured credit facility, the agency said. The company anticipates renewing its existing $210 million senior secured revolving credit facility, which matures in August 2012, Fitch said, and extending its maturity to 2014. The company also expects to renew its term loan B facility, which has $204 million outstanding, extending the maturity data from August 2012 to 2017.

The ratings reflect expectations for relatively stable credit metrics and the diversified revenue base associated with the company's business model, which integrates the wire line and wireless businesses, Fitch said.

The company's results have been pressured by the economy, as well as by competition in the wire line and wireless business segments, the agency added.

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