S&P rates US LEC, notes B-

Standard & Poor's said it assigned its B- corporate credit rating to US LEC Corp. The outlook is negative. A B- rating was also assigned to the company's proposed $150 million second-priority senior secured floating-rate notes due 2009.

Proceeds from the notes will be used to refinance about $120.4 million of bank debt and $6.8 million of subordinated notes at face value.

S&P said the ratings primarily reflect concerns over the longer-term viability of small competitive local exchange carriers like US LEC in light of the expected increase in competitive pressure from more formidable rivals.

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