Research Update: Go Wireless Holdings Inc. Outlook Revised To Negative On Weakened Performance And Covenants; 'B' Rating Affirmed

U.S.-based independent, exclusive Verizon retailer Go Wireless Holdings Inc. has underperformed our projections in 2019 as the industry faces an elongated upgrade cycle. We believe its covenant cushion under its first-lien credit agreement could tighten to about 10% in the next 12 months following the Sept. 30, 2019 covenant step down. On Dec. 12, 2019, S&P Global Ratings affirmed the 'B' issuer credit rating and 'B+' issue-level rating (with a '2' recovery rating) on Go Wireless. We are revising our outlook to negative from stable to reflect our expectation that operating headwinds could continue into the next 12 months making it harder for the company to improve its credit metrics to levels that would ensure adequate headroom under its debt

...- U.S.-based independent, exclusive Verizon retailer Go Wireless Holdings Inc. has underperformed our projections in 2019 as the industry faces an elongated upgrade cycle. - We believe its covenant cushion under its first-lien credit agreement could tighten to about 10% in the next 12 months following the Sept. 30, 2019 covenant step down. - On Dec. 12, 2019, S&P Global Ratings affirmed the 'B' issuer credit rating and 'B+' issue-level rating (with a '2' recovery rating) on Go Wireless. - We are revising our outlook to negative from stable to reflect our expectation that operating headwinds could continue into the next 12 months making it harder for the company to improve its credit metrics to levels that would ensure adequate headroom under its debt covenants. The negative outlook also takes into account the uncertainty around the impact on profitability of the company's recently announced sales force commissions restructuring....

Research Update