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February 5, 2008 |
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STRATOS GLOBAL: Improved Credit Prompts Moody's Outlook Change Moody's Investors Service has revised the outlook for Stratos Global Corporation to stable from negative and upgraded the SGL rating to SGL-3 from SGL-4. The outlook change and SGL upgrade reflect better than anticipated performance, which has improved the company's credit profile and mitigated concern over compliance with financial reporting covenants. Moody's also affirmed the B1 corporate family rating and all other ratings. -- Speculative Grade Liquidity Rating, Upgraded to SGL-3 from SGL-4 -- Outlook, Changed To Stable From Negative -- Affirmed B1 Corporate Family Rating -- Affirmed B1 Probability of Default Rating -- Affirmed Ba2 Senior Secured Bank Rating, LGD 2, 23% -- Affirmed B3 Unsecured Bonds Rating, LGD 5, 77% The ratings reflect revenue concentration, some revenue volatility related to the "on-demand" nature of most products, price pressure, expectations for flat to declining EBITDA and high leverage. Diversification by end-user customers and geographic markets and expectations for modestly positive free cash in 2007 and 2008 support the ratings. Furthermore, Moody's expects that Inmarsat plc (Ba2 corporate family rating) will exercise its call option to acquire Stratos Global in 2009, which reduces the risk associated with renewal of its distribution agreement and provides clarity on the company's longer term prospects. Stratos Global Corporation -- http://www.stratosglobal.com/ -- is a provider of a range of advanced mobile and fixed-site remote telecommunications solutions for users operating beyond the reach of traditional networks. The company serves the voice and high-speed data connectivity requirements of a diverse array of markets, including government, military, energy, industrial, maritime, aeronautical, enterprise, media and recreational users throughout the world. Stratos operates in two segments: Mobile Satellite Services, which provides mobile telecommunications services, primarily over the Inmarsat plc satellite system, and Broadband Services, which provides very small aperture terminal services, sourced on a wholesale basis from a number of the fixed satellite system operators. The company has offices the following regions: Europe -- Italy, Germany, Norway, Spain, United Kingdom Asia-Pacific -- India, Hong Kong, Singapore, Australia and Japan Latin America -- Brazil. |
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