Centennial Communications Corp. priced $500 million of 10.13-percent senior unsecured notes due 2013 to be issued in a private placement. The telecom provider said the senior notes will be co-issued with Centennial Cellular Operating Co. L.L.C. and guaranteed by Centennial Puerto Rico Operations Corp.
As part of the placement, Centennial said it is seeking an amendment to its senior credit facility that will provide the company with “additional flexibility under the financial and other covenants in the facility.”
If approved, Centennial plans to use $300 million of the net proceeds to repay a portion of the term loans under its senior credit facility and use the balance to repay amounts outstanding under the revolving portion of its senior credit facility and pay fees and expenses related to the transaction.
Citing the relatively high business risk of the wireless industry, particularly for regional carriers, Standard & Poor’s Ratings Services assigned a CCC rating to the offering and affirmed Centennial’s B- corporate credit rating.
“The regional wireless carriers have faced increased competition from the larger, national players such as Verizon Wireless and AT&T Wireless,” S&P said. “Carriers such as Centennial are disadvantaged relative to the national players in terms of their ability to offer competitively priced national plans. Moreover, the national players are expected to continue to be aggressive in taking share from the regional carriers, given the fact that overall wireless subscriber growth will continue to slow because of increased overall wireless penetration.”
