Connect Holding II LLC (Brightspeed) Downgraded To 'SD' From 'CCC'; Secured Debt Ratings Lowered To 'D'

U.S.-based telecommunications service provider Connect Holding II LLC (dba Brightspeed) recently completed a debt restructuring, which included about $3.65 billion of new money to help fund its fiber-to-the-home deployment. We view the transaction as distressed and tantamount to a default given the secured debt exchanges were completed at a discount to par without adequate compensation. Therefore, we lowered our issuer credit rating (ICR) on Brightspeed to 'SD' (selective default) from 'CCC'. We also lowered the issue-level ratings on the affected issues to 'D'. The 'CC' issue-level rating on operating subsidiary Embarq Corp.'s senior unsecured debt is unchanged since it was not part of the transaction. NEW YORK (S&P Global Ratings) Aug. 15, 2024—S&P Global Ratings today took the rating actions

...August 15, 2024 - U.S.-based telecommunications service provider Connect Holding II LLC (dba Brightspeed) recently completed a debt restructuring, which included about $3.65 billion of new money to help fund its fiber-to-the-home deployment. - We view the transaction as distressed and tantamount to a default given the secured debt exchanges were completed at a discount to par without adequate compensation. - Therefore, we lowered our issuer credit rating (ICR) on Brightspeed to '##' (selective default) from '###'. We also lowered the issue-level ratings on the affected issues to 'D'. - The '##' issue-level rating on operating subsidiary Embarq Corp.'s senior unsecured debt is unchanged since it was not part of the transaction. NEW YORK (S&P Global Ratings) Aug. 15, 2024--S&P Global Ratings today took the rating actions listed above. The downgrade follows the completed debt restructuring, which we view as distressed because lenders will receive less than the original promise. Brightspeed...

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