S&P: Eschelon view positive

Standard & Poor's said it revised its outlook on Eschelon Telecom Inc. to positive from developing following the company's consummation of its initial public offering, resulting in net proceeds of $69.8 million, of which roughly $51 million will be used to redeem the senior second secured notes due 2010.

All ratings, including the company's CCC+ corporate credit rating and CCC+ rating on its 8 3/8% senior second-lien secured notes due 2010, were affirmed, S&P said.

The change in outlook is the result of lower pro forma leverage of 2.4 times compared to roughly 6.0 times prior to the IPO, S&P said, adding the ratings reflect the company's vulnerable business position resulting from, among other factors, the highly competitive nature of the competitive local exchange carrier business.

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