NEW YORK-Citing concerns regarding the company’s ability to secure additional funding, Standard & Poor’s Rating Services lowered its corporate credit rating on Leap Wireless International Inc. to triple-C-minus from single-B-minus. S&P said Leap’s credit rating remains on CreditWatch with negative implications and that the company had $2.1 billion of debt outstanding.
“If Leap is not able to substantially improve the level of operating cash losses it incurs in the second half of 2002, it will run out of cash in the next two quarters, despite access to about $236 million of additional borrowing under its vendor facilities and cash and short-term investment balances of $207 million as of June 30, 2002,” said Catherine Cosentino, S&P’s credit analyst.
Cosentino also noted Leap may not be able to meet amended vendor financing arrangements through the end of the year if its operations do not materially improve.
