WAYNESBORO, Va.—Ntelos Inc., Waynesboro, Va., a regional wireline and wireless telecommunications provider, has received a downgrade from Moody’s Investors Service Inc. on the speculative-grade rating of approximately $605 million in bank credit facilities and debt securities.
In lowering Ntelos’ debt to Caa3 from B3, Moody’s cited the “high debt burden” of the company, which “is primarily due to the July 2000 acquisition from PrimeCo of wireless network and operations with 20 MHz of spectrum covering three million pops in Richmond and Norfolk, Va., for approximately $430 million, or $143 per pop.
By contrast, the rating agency noted that US Cellular Corp. is buying PrimeCo’s Chicago operations with 20 MHz of spectrum covering 13 million pops for $610 million, or $46 per pop.
“This diminution in value, in addition to Ntelos’ weaker-than-anticipated results since closing the transaction, combined with our expectation for continued softness, are the primary drivers of this downgrade,” said Moody’s corporate finance analysts Robert N. McCreary and Marcus C. Jones.
