Fitch Withdraws Ratings of Focal Communications.Business Editors CHICAGO--(BUSINESS WIRE)--July 9, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has upgraded the senior secured credit facility of Focal Communications (Focal) to 'CCC-' from 'D' and withdrawn the rating. The senior unsecured noteholders have received preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and warrants in the reorganization, therefore Fitch is withdrawing the 'D' rating on these securities. This rating action is the result of Focal's completion of its reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. , which was approved by the bankruptcy court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. on June 19, 2003. As a result of this reorganization plan, Fitch estimates indebtedness at the company decreased from approximately $450 million as of March 31, 2003, to $95 million on a March 31, 2003 pro forma basis, represented by the $78 million secured credit facility and a $17 million equipment loan. As of March 31, 2003, Focal had approximately $27 million of cash and cash equivalents, and it reported positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become results of $7.3 million in the first quarter of 2003. The rating of Focal is based on public information. With the rating withdrawal, Fitch will no longer be providing financial analysis on this company. |
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