NEW YORK-Standard & Poor’s Ratings Services affirmed its ‘CCC-‘ corporate credit rating on AirGate PCS Inc. and removed the Sprint PCS affiliate from its CreditWatch list, where its was placed with negative implications after the carrier defaulted on its bank loans and indenture for senior subordinated discount notes when it failed to file its annual 10-K report on Dec. 31.
S&P said the CreditWatch removal was due to AirGate curing its default under both the bank credit agreement and bond indenture by filing its annual report last month. S&P maintained its CreditWatch with negative implications rating on AirGate’s iPCS Inc. subsidiary.
“AirGate has weak liquidity and is at risk of violating two bank covenants in the near term,” said Michael Tsao, credit analyst at S&P. “In the absence of substantial and urgent improvements in operating and cash flow metrics, the company faces significantly increased potential of undertaking a financial restructuring. Maintenance of current ratings depends on the company showing these improvements.”
AirGate also received a delisting notice from the Nasdaq National Market earlier this week citing failure to regain compliance with the minimum $1 bid price per share requirement and failure to comply with the minimum $10 million stockholders’ equity requirements. The notice said AirGate’s stock would be delisted beginning Feb. 6 unless it appeals the decision, which AirGate said it intends to do.
AirGate’s stock was trading unchanged at 48 cents per share early Wednesday.
