NEW YORK-Standard & Poor’s has lowered its ratings of MobileMedia Communications Inc.’s subordinated debt to CCC from B-and its corporate credit rating to B- from B+. The credit rating agency has placed MobileMedia’s ratings on CreditWatch with negative implications.
About $460 million of rated debt is affected, said Standard & Poor’s.
MobileMedia is the second largest paging company in the United States with about 4.4 million pagers in service. The rating action reflects the company’s very limited financial flexibility near term as a result of its high debt levels and deferral in the previously anticipated improvement in overall financial measurements, said the agency. Standard & Poor’s said MobileMedia’s parent company, MobileMedia Corp., must issue $100 million of debt or equity and contribute the proceeds to MobileMedia before year-end to avoid a technical default in MobileMedia’s credit facility.
According to the agency, financial measurements have weakened over the past year because of unanticipated problems with the integration of the MobileComm acquisition, higher-than-expected integration costs and the impact of increased debt associated with recent acquisitions.
