Moody's rates new Crown Castle notes B3

Moody's Investors Service said it assigned a B3 rating to the new 7.5% senior notes due 2014 issued by Crown Castle International Corp. and confirmed the company's senior implied rating of B1 and the speculative grade liquidity rating of SGL-2.

The outlook remains negative.

Ratings affirmed at B3 include the company's $166 million 9% senior notes due 2011, $114 million 9.5% senior notes due 2011, $443 million 10.75% senior notes due 2011 and $407 million 9.375% senior notes due 2011. Confirmed at B1 were Crown Castle Operating Co.'s $350 million senior secured revolver due 2007, $193 million senior secured term loan A maturing 2007, and $1.1 billion senior secured term loan B maturing 2010.

Moody's said the B1 senior implied rating reflects the stable financial performance of the company, its good liquidity and its modest free cash flow generation, offset by weak returns on assets and the substantial debt burden of the company relative to the amount of free cash flow expected.

The B3 rating assigned to the new 7.5% senior notes and the B3 rating on the other senior notes of the ultimate parent holding company, reflects their structural subordination behind outstandings under the secured credit facilities of the company's subsidiaries.

Proceeds from the new senior notes along with cash provided by the approximately $300 million dividend to Crown Castle International from the upsized bank credit at Crown Castle Operating will be used to retire the company's two outstanding series of senior discount notes, whose ratings will be withdrawn after these obligations are repaid.

Moody's said the refinancing of the higher coupon 10.375% and 11.25% notes with lower cost bank debt and new 7.5% notes gets Crown Castle closer to its goal of achieving run rate interest expense of $200 million per year.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.