The following list includes ratings changes and financial information for wireless companies announced this week by investment-banking and financial-services firms.
Click here for wireless ratings from past weeks from RCR Wireless News.
Carrier
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Standard & Poor’s Ratings Services assigned its B- corporate credit rating to MetroPCS Communications Inc. and its CCC rating to MetroPCS Wireless Inc.’s $1.1 billion of senior unsecured notes due 2014. S&P said the company’s outlook is stable. The ratings firm also said it assigned a B rating to MetroPCS Wireless’ $1.5 billion of first-lien bank loans and a recovery rating of 1, which signals expectation of full recovery of principal in case of default. Proceeds from the bank loan and unsecured notes are expected to be used to repay $900 million of secured bank debt and to fund the $1.4 billion purchase of licenses the company picked up in the recent AWS auction. “The ‘B-‘ corporate credit rating reflects MetroPCS’ inherently challenging business model, which targets a lower-income customer niche, a highly competitive environment, and high leverage,” said Standard & Poor’s credit analyst Catherine Cosentino.
- Standard & Poor’s Ratings Services said it assigned a CCC rating to the proposed $750 million senior notes due 2014 issued by Cricket Communications Inc. The firm said parent company Leap Wireless International’s B- corporate credit rating has been affirmed with a stable outlook. Proceeds from the notes along with proceeds from Leap’s recent equity offering will be used to repay its bridge loan facility, which was used to fund the company’s payment for licenses it won during the recent AWS auction.
Handset and infrastructure vendors
- CIBC World Markets raised its estimates on L.M. Ericsson based on strength in Sony Ericsson unit shipments.
Other
- Lehman Brothers made several changes to its estimates on wireless tower companies. The firm raised its price target and estimates on American Tower Corp. based on improved visibility for leasing activity during the next two years. Lehman also raised its price target on American Tower to $46 from $40. The company raised its price target on Global Signal Inc. to $56 from $49 on news it is being acquired by Crown Castle. The firm also raised its price target on SBA Communications to $37 from $30.
- CIBC World Markets lowered its estimates on Powerwave Technologies after the company announced guidance that falls well short of estimates. For 2006, CIBC cut its estimates on the company to $779.4 million and 13 cents per share from $880.5 million and 34 cents per share. For 2007, estimates drop to $863.3 million and 26 cents per share from $1.09 billion and 58 cents per share. First Albany Capital lowered its expectations for Powerwave to 20 cents on $761.5 million for 2006, from 37 cents on $863.4 million. For 2007, it expects EPS of 15 cents on revenues of $774.7 million, down from 50 cents on revenues of $920 million. Credit Suisse First Boston lowered its rating on the company to neutral from outperform and dropped its price target on the company from $12 to $8. It also lowered its estimates on the company to $750 million and 16 cents per share from $875 million and 36 cents per share for 2006; and to $850 million and 42 cents per share from $968 million and 62 cents per share for 2007. Robert W. Baird lowered its estimates on Powerwave to 20 cents from 35 cents for 2006 and to 30 cents from 42 cents for 2007.
