S&P assigns Hargray B, loans B, CCC+

Standard & Poor's said it assigned its B corporate credit rating to Hargray Holdings LLC.

The outlook is positive.

In addition, S&P said it assigned bank loan ratings to the proposed $315 million aggregate facilities of Hargray's funding conduits, Hargray Communications Group Inc., DPC Acquisition LLC and HCP Acquisition LLC.

A B bank loan rating was assigned to the $25 million senior secured first-lien revolver and $195 million term loan B and a CCC+ rating was assigned to the $95 million senior secured second-lien-term loan C, the agency added.

The recovery rating for the first-lien revolver and term loan B is 3, suggesting meaningful recovery in the event of payment default, the agency said.

According to S&P, the ratings on Hargray reflect its concentrated services area and small size, a new management team, below-industry-average profitability, a weak wireless business with significant competition and a highly leveraged financial risk profile.

Mitigating factors include Hargray's solid position as an ILEC, which represents about 90% of its access lines, with limited competition and favorable demographics, the agency noted.

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