NEW YORK-Standard & Poor’s Ratings Services lowered its corporate credit ratings on Dobson Communications Corp. from B+ to B, citing the impact of lower roaming yield on revenue growth, lower net customer additions compared with guidance for full-year 2002 and overall slower industry growth.
S&P also placed its rating on Dobson on CreditWatch with negative implications reflecting what it called “uncertainty related to the Dobson family loan with Bank of America, which matures on March 31, 2003, unless extended.”
“Over the past year, Dobson Communications’ revenue growth has been impacted by the decline in roaming yield and overall slower industry growth. This has been offset somewhat by cost controls and aggressive marketing of local and preferred national plans,” said Rosemarie Kalinowski, credit analyst at S&P. “However, in the third quarter of 2002, Dobson Communications’ revenue growth declined to 6 percent compared with the second quarter of 2002, which experienced a 12-percent growth rate sequentially, due to lower net customer additions and lower roaming revenue growth.”
In addition, S&P lowered its corporate credit rating on Dobson’s American Cellular Corp. joint venture with AT&T Wireless Services Inc. from CCC- to CC due to the potential for debt restructuring in the near future. S&P also maintained its CreditWatch with negative implications rating on American Cellular.
