S&P: Leap Wireless loan B+

Standard & Poor's said it assigned its B+ issue-level rating and 1 recovery rating to Leap Wireless International Inc.'s proposed $400 million term loan, which will be issued by subsidiary Cricket Communications Inc.

The 1 recovery rating denotes very high recovery prospects in the event of a payment default. The term loan will rank equally with Cricket's existing $1.1 billion of senior secured notes.

At the same time, the agency said it revised the recovery rating on the unsecured notes at Cricket to 4 from 3. The 4 recovery rating denotes expectations for average recovery in the event of a payment default. The issue-level rating on the unsecured notes remains B-.

Parent Leap Wireless' corporate credit rating remains B- with a stable outlook and all other issue-level ratings remain unchanged.

S&P said it projects a modest increase in leverage due to the proposed financing and debt repayment, to about 6.5x pro forma as of June 30, 2012, but this remains consistent with the agency's financial risk assessment of highly leveraged.

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