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S&P affirms RCN Telecom
Standard & Poor's said it affirmed the B rating on RCN Telecom Services LLC's proposed upsized term loan, along with its B corporate credit rating.
RCN intends to increase its term loan due 2016 by $125 million to $658 million to finance a $121 million dividend to owner, ABRY Partners.
The secured credit facilities include a $40 million revolver due 2015. The recovery rating is 4, indicating 30% to 50% expected recovery in a default.
The outlook is stable.
The ratings continue to incorporate the aggressive financial policy of the company's private-equity owners and the proposed dividend recapitalization is consistent with that view, S&P said.
The ratings continue to reflect the challenging operating environment inherent in the company's predominant cable-TV overbuilder model within the context of a mature cable-TV industry, the agency said, and the company's private-equity owner's aggressive financial policy.
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