NEW YORK-Standard & Poor’s ratings on PriCellular Wireless Corp. remain on CreditWatch with negative implications even after the announcement that its parent company, PriCellular Corp., will be acquired by American Cellular Corp.
American Cellular may fund some portion of the purchase with debt, which would increase pressure on the modest debt service capacity of PriCellular Wireless, said S&P, warning that incremental debt at any level in the post-merger entity may result in a downgrade of the corporate credit rating.
S&P said it anticipates the existing debt will be retired, which would substantially improve American Cellular’s flexibility in managing the finances of the combined companies.
