S&P boosts Hargray

Standard & Poor's said it raised its corporate credit and senior secured debt ratings on Hargray Holdings LLC to B+ from B and on its senior secured second-lien term loan to B- from CCC+.

The outlook is stable.

The action, and the change in the company's financial risk assessment to aggressive from highly leveraged, reflects Hargray's improved credit measures over the past year from EBITDA growth and debt reduction, according to the agency.

The company's adjusted total debt-to-EBITDA ratio fell to 4.8x as of March 31, from 5.4x in the year-ago period.

"Since the 2007 acquisition by private equity sponsor Quadrangle Capital Partners, the company has materially improved leverage, largely through cost reductions, including a billing system conversion," S&P analyst Allyn Arden said in a statement.

"Moreover, revenue has remained stable despite economic pressures as ongoing access line losses have been offset by growth in high speed data and video services. We expect leverage to remain in the mid- to high-4x area over the next couple of years."

Ratings reflect Hargray's concentrated service area and small size, profitability slightly below industry average and an aggressive financial risk profile, the agency said.

Mitigating factors include the company's favorable position and customer demographics, the agency noted.

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