S&P rates Iridium B-, notes CCC

S&P said it assigned its B- corporate credit rating to Iridium Communications Inc.

The outlook is negative.

At the same time, the agency assigned a CCC issue-level rating and 6 recovery rating to Iridium 's proposed $360 million of unsecured notes due 2023. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a default.

S&P said the rating reflects Iridium's very high financial leverage, operations in a fairly narrow telecommunications niche, short-term commercial contracts that could result in customer churn or pricing pressure on renewals, concentration of revenue with the Department of Defense and the risks still involved with launching the remaining Iridium NEXT satellites.

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