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S&P might cut Avanti
Standard & Poor's said it placed its B- long-term corporate credit rating on Avanti Communications Group plc on CreditWatch with negative implications.
At the same time, the agency placed its B issue ratings on the company's senior secured debt on CreditWatch with negative implications. The recovery rating is unchanged at 2, indicating an expectation of substantial recovery prospects in the event of default, in the lower half of the 70%-90% range.
S&P said the CreditWatch placement follows Avanti's weaker-than-anticipated performance in the first half of financial year 2016, and reflects the agency’s view that it could lower the ratings if Avanti is not able to secure sufficient additional liquidity sources in the near future.
In S&P’s view, Avanti's current liquidity sources could be insufficient to fully cover expected cash interest costs and committed investment programs over the next two years – particularly if it fails to meaningfully increase its satellite utilization.
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