NEW YORK-Radio Movil Digital Americas Inc., a Deerfield Beach, Fla., specialized mobile radio carrier focused on South America, expected to place privately $130 million in debt last week.
Lehman Brothers Inc., New York, is lead underwriter for the sale of seven-year senior discount notes. The securities received speculative grade ratings of Caa from Moody’s Investors Service Inc. and CCC+ from Standard & Poor’s Corp., both headquartered in New York.
The notes will provide the primary funding for Radio Movil’s establishment of a wireless network, according to Moody’s. “Founded in 1992, RMD is a development stage company that owns, operates and will construct a Latin American regional system of high-capacity SMR telecommunications networks cells,” Moody’s rating report said.
Radio Movil now operates in Brazil, Argentina and Venezuela. It has acquired channels and plans to add service in Ecuador and Chile.
“Using proven SMR technology and equipment from Motorola Inc. and other established vendors, RMD will be able to provide reliable communications links, such as one-to-many connections for mobile work force applications, at an affordable cost,” said the Moody’s report, written by Catherine Guinee and Dan Pakenham, both senior analysts in the speculative grade group. RMD already has established competitive sales and distribution capabilities in Brazil and Venezuela, and is rapidly expanding its market presence in its other targeted Latin American markets.
The notes will be subordinate to, “drawdowns under various vendor debt facilities the company has or intends to put in place,” Moody’s said.
The rating agency also said Radio Movil faces “operational challenges” in its expansion as well as competitive pressures from other types of wireless communications carriers.
