S&P rates D&E facility BB-

Standard & Poor's said it assigned its BB- corporate credit rating to D&E Communications Inc. A bank loan rating of BB- and a recovery rating of 3 were assigned to the company's proposed $225 million senior secured credit facility.

The outlook is negative.

S&P said the ratings primarily reflect D&E's small size, lack of geographical diversity, and significant exposure to the risky competitive local exchange carrier business.

Somewhat mitigating D&E's business risk is its moderate leverage and free cash flow prospects. At Sept. 30 total debt to annualized quarterly EBITDA of about 4.1x was lower than the 6x average for other small independent local exchange carriers rated by S&P.

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