The ratings on Louisville, Colo.-based Zayo Group LLC (Zayo) reflect a highly leveraged capital structure and expansion risk as Standard&Poor's Ratings Services expects the company to remain an aggressive consolidator of regional fiber-based telecom networks. Other factors include significant capital expenditure requirements to grow the fiber-to-the-tower business, which will likely delay free cash flow generation for the near term, and the company's small scale. Tempering factors include its niche position within the regional-based telecom network sector serving smaller, less competitive markets and predictable revenue stream with sizable contractual revenue backlog. Zayo is a regional provider of fiber-based telecom infrastructure and neutral collocation. Once it completes its acquisition of American Fiber Systems (AFS) and including the recent AGL Networks
