Moody's rates RCN loans B2

Moody's Investors Service said it assigned RCN Corp. provisional B2 ratings to its proposed $25 million senior secured revolving credit facility due 2015 and $240 million term loan due 2016, along with a provisional corporate family rating of B2 and provisional probability of default rating of B3.

The ratings are based on an expectation that RCN will maintain ownership of and/or have access to about 10,000 fiber route miles and 335,000 fiber strand miles following the completion of the $1.2 billion acquisition of RCN by ABRY Partners and subsequent split-off of RCN's cable residential and small- and medium-sized business assets, Moody's said.

The ratings reflect the company's small scale in a competitive environment and capital intensity that tempers free cash flow generation, the agency said.

A large portion of the company's footprint is in the northeastern United States, which is the most competitive telecommunications market in the country, Moody's added.

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