NEW YORK-Citing “consistently strong operating results” and a “very good liquidity position,” Moody’s Investors Service raised the ratings July 5 on approximately $1.3 billion in debt of Triton PCS, which in 1998 became the first affiliate of AT&T Wireless Services Inc.
Moody’s upgraded to B2 from B3 its speculative-grade rating on Triton’s outstanding senior subordinated notes and to Ba3 from B1 its speculative-grade rating on the carrier’s senior secured credit facilities.
Headquartered in Berwyn, Pa., Triton has about 520,000 subscribers and licenses covering more than 13 million people in a contiguous footprint in the southeastern United States.
As of March 31, the wireless operator had $500 million in cash on hand and $250 million of unused credit facilities, Moody’s said.
“Due to the company’s position in its markets, with completed network, compelling service offering and quality customer service, Moody’s believes that Triton is well positioned to withstand increased levels of competition going forward,” said Michael Rowan, managing director, and Marcus C. Jones, senior analyst, for Moody’s Corporate Finance Group.
That competitive pressure is likely to decrease as a result of the recent federal appellate court ruling in favor of C-block auction bidder NextWave Telecom Inc.
“Triton PCS will benefit from the lack of an additional competitor in many of its markets, as VoiceStream was an aggressive bidder in the Southeast whose entry as a new competitor will likely be delayed,” Rowan and Jones said.
Triton also is likely to benefit if Lafayette Communications, of which it owns 39 percent, experiences delays or denial in obtaining C-block licenses, which are “now subject to considerable uncertainty due to legal challenges by NextWave,” the Moody’s analysts said.
Although the licenses for which Lafayette bid $170 million are for coverage within Triton’s existing footprint, Triton “is not currently constrained by its 20-megahertz spectrum position,” they said.
“Should those licenses not be granted to Lafayette, Moody’s expects that Triton’s already strong liquidity position will further improve because Lafayette will not require funding from Triton,” Rowan and Jones said.
“Should those licenses be granted to Lafayette, even though Triton will fund their purchase, its further capital requirements will be limited because that spectrum will be used by the existing Triton PCS network assets.”
