S&P assigns Eschelon Telecom notes B-

Standard & Poor's said it assigned its B- rating to Eschelon Telecom Inc.'s $46 million 8.375% senior second secured notes due 2010.

The ratings continue to reflect a high degree of credit risk stemming from the company's vulnerable business position due primarily to the highly competitive CLEC business, S&P noted.

Additionally, the ratings incorporate integration risk associated with the recent acquisition of Oregon Telecom Inc., a CLEC serving the Oregon and Washington markets and Eschelon's modest liquidity, the agency noted.

Tempering factors include the company's modest leverage, low churn and flexibility with respect to capital spending, S&P said.

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