Moody's rates US LEC notes B3

Moody's Investors Service said it assigned a B3 rating for the proposed $150 million senior secured (second-priority lien) notes due 2009 of US LEC Corp.

Moody's assigned US LEC a Caa1 senior implied rating, Caa2 issuer rating and SGL-3 speculative grade liquidity rating.

Moody's said the ratings broadly reflect the substantial business risk of the sector in which US LEC operates and the company's limited track record in generating meaningful free cash flow to date offset somewhat by comparatively moderate financial risk. The outlook is stable.

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