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S&P rates tw telecom notes B-
Standard & Poor's said it assigned B- issue and 6 recovery ratings to tw telecom holdings inc.'s proposed $430 million of senior notes due 2018, to be issued under rule 144A with registration rights.
The outlook is stable.
The B+ corporate credit rating was affirmed.
Proceeds will be used to refinance debt.
"The new notes will add a degree of financial flexibility by extending maturities, although we do not expect material improvement in credit measures over the year given still-weak business conditions," S&P analyst Allyn Arden said in a statement.
"The ratings on tw telecom continue to reflect the risks of competing with larger and better capitalized regional Bell operating companies in an industry subject to increasing price competition," Arden said.
They also reflect a business plan characterized by high capital expenditure requirements and a long sales cycle associated with selling to larger business customers, the agency noted.
Tempering factors include tw telecom's well-established network with a significant footprint, a good niche, some revenue stability from multiyear contracts, moderate leverage and reasonable liquidity, S&P said.
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