Centennial Puerto Rico Corp., a subsidiary of Centennial Communications Corp., Neptune, N.J., plans to raise $250 million in eight-year notes to help finance its Caribbean expansion.
Centennial’s personal communications services operations in Puerto Rico cover 3.9 million people, of which 169,000 are subscribers.
“Subscriber growth in Puerto Rico has slowed recently due to the launch of new competition … and the ongoing competition among established players,” Moody’s Investors Service Analysts Tom Marshella and Marcus C. Jones said.
Moody’s assigned March 24 a speculative grade rating of B3 to the $250 million issue of senior subordinated notes due 2008.
To counter slowing PCS customer growth in Puerto Rico, Centennial has announced plans to acquire a cable television system on the island and a 70 percent stake in a PCS license holder in the Dominican Republic.
“While Moody’s recognizes the strategic sense of the Caribbean expansion … [we] are concerned that these new acquisitions [and] some incremental expansion in the Caribbean will require substantial capital to acquire and develop, heightening Centennial’s financial risk in the near term,” Marshella and Jones said.
However, Moody’s also assigned a “stable outlook” to Centennial’s new and outstanding debt. This reflects the rating agency’s expectation that the carriers’ “core operations in the United States and Puerto Rico will continue to show good growth in subscribers and cash flows.”
