S&P reassigns FairPoint CC

Standard & Poor's said it reassigned a CC corporate credit rating with a negative outlook to FairPoint Communications Inc., from the previous SD.

The agency said it also raised the rating to C from D on the approximate $90 million of aggregate principal amount remaining on the company's unsecured notes that did not participate in its exchange offer.

The recovery rating on the notes is 6, S&P noted.

S&P added that it also removed the CC secured bank loan rating from Creditwatch, where it had been placed with negative implications on June 25, following the company's announced note exchange. The loan has a 3 recovery rating.

"We reassigned a corporate credit rating of CC, given the very limited liquidity being experienced by the company since the cutover from the Verizon systems due to operational issues," said S&P credit analyst Catherine Cosentino, "the uncertain prospects for near-term payment of interest and loan amortization, and uncertain ability to meet existing covenants in the credit facility over the coming quarters."

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