NEW YORK-Arch Communications Group Inc. plans a $200 million bond issue, which received a B3 rating Feb. 22 from Moody’s Investors Service, according to the agency.
The bond issue will partially finance Arch’s acquisition of Westlink Paging Inc., said Bob Nabholz, a director at Prudential Securities Inc., New York, lead manager of the deal.
The debt offering is expected to be priced for sale in early March, he said.
According to Moody’s, the Arch issue is to be comprised of senior discount notes due in 2008. The new notes “will be structurally subordinated to all operating company liabilities,” the rating agency said.
Moody’s also assigned B1 ratings to a $450 million credit agreement that Arch Communications Enterprises Inc. has with a group of banks, as well as to a USA Mobile Communications Inc. $50 million bank credit agreement. It also upgraded a total of $225 million in outstanding USA Mobile senior notes to B2 from B3. USA Mobile, based in Cincinnati, Ohio, recently merged with Arch Communications Group, a holding company headquartered in Westborough, Mass.
“The ratings*…*reflect the consolidated Arch Group’s average market strength in the highly competitive U.S. narrowband wireless paging industry, and the three to five year window before new wireless communications services present a broad based competitive threat,” Moody’s said.
Moody’s also based its rating, in part, on Arch’s recent acquisition of San Diego-based Westlink Paging. “With the Westlink acquisition, Arch will have a more balanced business in terms of the geographic distribution of its customer base, network and channels of distribution,” the report said.
