Moody's confirms Time Warner Telecom

Moody's Investors Service said it has confirmed the ratings provisionally assigned on Feb. 5 of Time Warner Telecom's proposed new debt issuance.

Ratings confirmed include Time Warner Telecom Holdings Inc.'s proposed $150 million senior secured revolver due 2009 at B1, $380 million senior secured revolver due 2007 at B1, $200 million senior secured term loan due 2007 at B1, $220 million senior secured delayed draw term loan due 2007 at B1, $240 million senior secured second lien floating-rate notes due 2011 at B1, $200 million senior unsecured notes due 2014 at B2.

Also confirmed was Time Warner Telecom Inc.'s senior implied rating of B2 and $400 million 9¾% senior unsecured notes due 2008 at B3 as well as its speculative grade liquidity rating of SGL-2.

Moody's upgraded Time Warner Telecom Inc.'s issuer rating to B3 from Caa1 and the $400 million 10 1/8% senior unsecured notes due 2011 to B3 from Caa1.

The outlook is negative.

Moody's said the ratings reflect continuing top line pressure resulting from competitive pricing, customer disconnects, and interconnection rate compression, as well as the company's high leverage and its inability, to date, to generate positive free cash flow. However, the ratings are supported by Time Warner Telecom's good liquidity position, the recent growth in its enterprise customer business, and the strength of its management team.

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