Competitive local exchange carrier (CLEC) U.S. TelePacific Holdings Corp. (TelePacific) continues to improve its profitability and is capitalizing on sales of high margin, value-added products while diversifying away from declining basic telephone service and low-bandwidth Internet products. We are raising our corporate credit rating on TelePacific to 'B' from 'B-'. We are also raising our issue-level rating on the company's senior secured revolver and term loan to 'B' from 'B-', and revising the recovery rating on the debt to '3' from '4'. The stable rating outlook reflects our expectation that revenues will grow modestly over the next year as the company increases its market penetration among larger business customers, while maintaining churn at low levels and the EBITDA margin in
