Moody's drops Paniolo notes

Moody's Investors Service said it has downgraded the Baa3 and Ba2 ratings of Paniolo Cable Co., LLC's senior secured series A and second-lien series B notes to B1 and B3, respectively.

The ratings remain under review with direction uncertain.

According to the agency, the downgrades consider that unless the Federal Communications Commission's reverses the National Exchange Carrier Association's decision to deny the request by Sandwich Isles Communications, Inc., the lessee of Paniolo's fiber optic network, for recovery of costs associated with the lease, the notes are very likely to default.

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