NEW YORK-Standard & Poor’s Rating Services assigned its ‘B+’ bank loan rating and a ‘3’ recovery rating to Nextel Partners Inc.’s wholly owned subsidiary Nextel Partners Operating Corp. $800 million senior secured credit facility. S&P also assigned a ‘B-‘ rating to Nextel Partners’ $25 million 8.125-percent senior notes due 2011.
In addition, the ratings agency affirmed its ‘B1′ rating on Nextel Partners’ senior unsecured debt and removed it from CreditWatch with positive implications and affirmed the carrier’s ‘B+’ corporate credit rating with a stable outlook.
“The rating on Nextel Partners is dominated by financial risks associated with the company’s still aggressive leverage, which was about 5.5 times debt to annualized [earnings before interest, taxes, depreciation and amortization] for the quarter that ended in March 2004,” said S&P credit analyst Michael Tsao. “The high leverage is mainly a legacy of the company’s use of substantial debt to finance the building of a network and operating losses that typically occur in the early stages of a business. Somewhat mitigating these risks is Nextel Partners’ good competitive position and solid EBITDA and free cash flow prospects.”
John Chapple, Nextel Partners’ chief executive officer and president, also reaffirmed the carrier’s full-year guidance at an industry conference Monday, noting the carrier was “on solid ground for meeting or exceeding its objectives for 2004.”
