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Recovery Report: EarthLink Inc.'s Recovery Rating Profile
Standard & Poors, May 2011
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
Standard & Poor's Ratings Services is assigning its preliminary issue-level and recovery ratings to Atlanta-based alternative telecom provider EarthLink Inc.'s proposed $400 million of senior unsecured notes due 2019. The company may use the proceeds for the redemption of its $256 million of convertible senior notes, with remaining proceeds to be used for general corporate purposes, including acquisitions, as well as redemption or repurchase of its ITC DeltaCom senior secured notes. We simulate a default occurring during 2015, primarily reflecting intensified industry competition, resulting in price compression and elevated churn. The pro forma debt structure consists of two distinct credit groups: EarthLink and its subsidiaries and ITC DeltaCom (ITC) and its subsidiaries. Given the debt structure and by virtue of...
Companies mentioned in this report are: EarthLink Inc.