S&P gives B to U.S. TelePacific loan

S&P said it assigned its B issue-level rating to Los Angeles-based competitive local exchange provider U.S. TelePacific Corp.'s senior secured credit facilities, which consist of a $25 million revolving credit facility due 2022 (undrawn) and $655 million term loan due 2023.

The recovery rating on the new senior secured debt is 4, indicating an expectation of average (30%-50%; rounded estimate: 45%) recovery of principal and interest for secured lenders in the event of payment default.

TelePacific will use the proceeds from the term loan to repay the company's existing debt, including $494 million outstanding on its term loan B due 2020 and $130 million of senior secured notes due 2021, pay transaction fees and related costs, and add cash to the balance sheet. The B corporate credit rating and stable outlook on parent company U.S. TelePacific Holdings Corp. is unchanged.

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