S&P rates Time Warner Telecom convertibles CCC+

Standard & Poor's said it assigned a CCC+ rating to Time Warner Telecom Inc.'s proposed $200 million in convertible senior debentures due 2026.

S&P also affirmed the company's B corporate credit rating and CCC+ senior unsecured debt rating and Time Warner Telecom Holdings Inc.'s B secured bank loan with a recovery rating of 5 and CCC+ senior secured second-lien floating-rate notes. The outlook is negative.

Proceeds from the convertibles will be used to repay a portion of the company's 10 1/8% senior notes due 2011.

S&P said the ratings for Time Warner Telecom reflect the risks inherent in competing with larger, stronger incumbents in an industry subject to increasing price competition. The company's business plan is also characterized by high capital expenditure requirements that continue to defer its ability to generate positive net free cash flows and the company is highly leveraged, at about 5.7x on an operating-lease-adjusted basis.

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