S&P upgrades iPCS

Standard & Poor's said it raised iPCS Inc.'s corporate credit rating to B- from CCC+ and senior unsecured debt rating to B- from CCC. The outlook is stable.

S&P said the upgrade reflects improvement in the company's credit protection measures following its emergence from bankruptcy in mid-2004, its enhanced business profile resulting from the July 2005 merger with Horizon PCS Inc. and adequate liquidity. Investments made by iPCS over the past two years in its sales infrastructure and wireless network are beginning to produce positive operating results, and debt to EBITDA, adjusted for operating leases, declined to 5.7x at Dec. 31 from 6.6x at Sept. 30, pro forma for the merger with Horizon.

Although operating performance has improved, the agency described the company's credit risk as "still significant." Risk factors include the company's reliance on Sprint Nextel Corp., which owns the wireless spectrum licenses used by the company to provide service; uncertainty regarding ongoing litigation with Sprint Nextel regarding exclusivity provisions contained in the companies' affiliate agreement; and iPCS's negligible net free cash flow and aggressive leverage.

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