S&P gives Fusion B, facilities B, CCC+

S&P said it assigned its B corporate credit rating to Fusion Telecommunications International Inc.

The outlook is negative.

At the same time, the agency assigned its B issue-level rating and 3 recovery rating to the company's proposed senior secured first-lien credit facilities, which consist of a $50 million revolving credit facility due 2023 and $500 million first-lien term loan due 2025.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of default.

The agency also assigned its CCC+ issue-level rating and 6 recovery rating to the company's proposed senior secured second-lien term loan due 2025. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

“The ratings on Fusion, which are pro forma for its acquisition of Birch, reflect the company's relatively small scale and intense competition from a multitude of companies providing telecommunications services to small and midsize (SMB) businesses (including better-capitalized telecom providers and cable operators), which account for the majority of Fusion's customer base,” S&P said in a news release.

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