NEW YORK-Wholly owned subsidiaries of VoiceStream Wireless Corp. and Omnipoint Corp., whose merger is expected to close by spring, have secured a $3 billion bank loan, Standard & Poor’s Corp. said last week.
VoiceStream also is in the process of acquiring Aerial Communications Inc. The combined trio will have about 1.5 million personal communications services subscribers and cover a population of approximately 191 million.
“Although some existing markets have turned cash-flow positive, start-up costs of new market expansion [and] integration costs should keep overall cash-flow negative in the near term,” said Timothy E. Caffrey, a director of corporate ratings.
“Weakness is somewhat offset by outside investors Hutchison Whampoa Ltd., Sonera Group plc and Telephone & Data Systems, whose equity investments and strategic support contribute to a strong base from which to improve VoiceStream’s overall credit picture … Risks (also) are somewhat offset by the experienced and innovative management team.”
Standard & Poor’s accorded the senior secured bank credit facility a speculative grade rating of B+.
