S&P slashes Radiate Holdco

S&P said it dropped all its ratings for Radiate Holdco LLC by two notches, including the senior secured rating to CCC+ from B.

The agency expects Radiate’s S&P Global Ratings-adjusted leverage to be in the high-7x area and for free operating cash flow (FOCF) to be negative through 2023.

“Even as FOCF somewhat improves, we project limited FOCF through 2025 due to higher interest rates, capital spending requirements, and limited EBITDA growth,” S&P said in a press release.

“Given the operating challenges in 2022, we believe that it will be very difficult for Radiate to grow residential broadband subscribers at a rate that would drive meaningful earnings growth in 2023 and potentially beyond. We revised our forecast to 40,000 net residential broadband subscriber losses in 2022, down from our previous expectation of about 5,000 net adds this year. In 2023, we believe that the company can stem the rate of decline to less than a quarter of projected losses in 2022, due to operational improvements at the recently acquired WOW assets, new builds, and edge-out activity,” the agency said.

The outlook is negative.

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