NEW YORK-Citing what it called modest improvements in the carrier’s financial profile, Standard & Poor’s Ratings Services raised its outlook on US Unwired Inc. from negative to developing and reaffirmed its ‘CCC-‘ corporate credit rating on the company.
S&P noted the combination of a credit agreement amendment last October and the receipt of approximately $40 million in gross proceeds from the sale of “noncore” cellular and tower assets alleviated previous concerns about potential near-term debt restructuring activities and led to the revision.
S&P added that despite the upward revision there was continued uncertainty surrounding US Unwired’s ability to withstand competitive pressure after wireless number portability becomes effective across the country beginning May 24 as well as service long-term commitments.
The company could be challenged to boost discretionary cash flow, particularly after cash interest becomes due on its discount notes in 2005, and could consume its modest covenant cushion, S&P stated.
