NEW YORK-Nextlink Communications Inc., a Bellevue, Wash., provider of competitive wireline local and long-distance services, plans a $750 million offering of 10-year notes to help finance its network buildout.
In according the proposed debt issue a speculative grade rating of B3, Moody’s Investors Service Inc., New York, cited several Nextlink moves it believes afford the carrier “considerable operational flexibility.”
Foremost is its purchase of local multipoint distribution system spectrum, which gives Nextlink “broadband wireless capability, limits [its] dependency on incumbent service providers and provides operation options in how to service customers,” said Robert Konefal, managing director, and Douglas Bontemps, senior analyst, for Moody’s corporate finance group.
In their May 18 ratings announcement, the Moody’s analysts also said Nextlink is following a plan that already has proven successful for enhanced specialized mobile operator Nextel Communications Inc. Craig McCaw “largely controls” both companies, Moody’s said.
“That strategy-proving business execution in less competitive markets and then expanding off that successful foundation-provides a degree of conservatism,” Konefal and Bontemps said.
Success followed by further geographic and product expansion are likely to strengthen Nextlink’s operations while also adding some risk and additional debt issuance, said Moody’s.
