Moody’s assigns Consumer Cellular B2

Moody’s Investors Service said it assigned a first-time B2 corporate family rating and B2-PD probability of default rating to Consumer Cellular (CCI Buyer, Inc.).

Moody’s also assigned B1 ratings to the company’s proposed first-lien credit facilities, consisting of a $100 million revolver (undrawn at close) due 2025 and a $1.1 billion term loan due 2027. Moody’s also assigned a Caa1 rating to the $300 million second-lien term loan due 2028.

“Consumer Cellular’s B2 CFR reflects its high debt/EBITDA, which Moody’s estimates to be around 7.3x pro forma for the debt issuance and including Moody’s standard adjustments for LTM Sept. 30, 2020,” the agency said in a press release.

Proceeds, a common equity contribution and $200 million of PIK preferred equity will fund the company’s leveraged buyout by the private equity firm GTCR.

The rating outlook is stable. “Moody’s projects that the company will be able to delever to debt/EBITDA in the 5-6x range (Moody’s adjusted) over the next 12-18 months supported mainly by EBITDA growth, even as growth moderates to high-single-digit range,” the agency said.

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