...- U.S.-based incumbent telecom provider Connect Holding II LLC (d/b/a Brightspeed) significantly underperformed our expectations in 2023 and we do not expect it will materially improve its performance in 2024. - We expect the company will generate a large free operating cash flow (FOCF) deficit of about $1.7 billion in 2024, which follows the $800 million deficit it reported in 2023. Given our expectation it will likely exhaust its liquidity by the end of 2024, we view the risk of a default or restructuring as elevated. - We lowered our issuer credit rating on Brightspeed to '###' from 'B-'. At the same time, we lowered our issue-level rating on its senior secured debt to '###' from 'B-' and our issue-level rating on the 7.995% Embarq notes due 2036 to '##' from '###'. Our '3' recovery rating on the secured debt and '6' recovery rating on the Embarq notes are unchanged, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) and negligible recovery (0%-10%; rounded...
