NEW YORK-A private placement of $450 million of eight-year senior subordinated notes, which American Cellular Corp., plans to issue, received a speculative-grade rating of B from Standard & Poor’s Corp., the debt rating organization said March 9.
Jointly owned by AT&T Wireless Services Group and Dobson Communications, American Cellular operates a TDMA network providing service to rural and suburban portions of Illinois, Kentucky, Michigan, Minnesota, New York, Pennsylvania, Tennessee, West Virginia, Wisconsin, Kansas and Oklahoma. At the end of last year, it had 554,400 subscribers.
About $200 million of the planned debt issue will repay bank debt and be set aside as a reserve to pay interest on the newly sold notes.
S&P said it expects American Cellular to spend about $90 million this year on capital expenses, up from $68 million in 2000, but did not indicate whether proceeds of the debt issue will be used for this purpose.
The rating agency also said the carrier’s “current business plan is fully funded, (but that) transition to third-generation technology will depend on demand for the services and access to related financing.”
