Moody's Shows Increased Confidence in tw telecom

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Moody's Investors Service has placed more faith in tw telecom's ability to repay its obligations, upgrading ratings on its senior secured facilities and unsecured debt.

The action was taken a few days after tw telecom revealed repaying a $101.5 million term loan due in January 2013.

Moody's upgraded the ratings of tw telecom holding inc.'s senior secured facilities, which includes an $80 million revolver due in 2014 and $465 million term loan due in 2016. The New York-based credit ratings agency also upgraded the ratings of tw telecom's $430 million senior notes due in 2018.

"Despite elevated levels of capital spending and relatively high leverage, the Company's strong operating performance driven by consistent revenue growth in the enterprise segment and strong margins due to TWTC's significant fiber infrastructure are positive for the ratings," Moody's stated Monday. "The Company's results reinforce its differentiated business model that relies on a fiber-rich network with direct connections to major customers, eliminating the need to rely on incumbent carriers for a critical portion of its last mile connections.TWTC continues to have success targeting its medium to large enterprise customers rather than small-medium size business customers, and the Company's stake is built on near-nationwide operating scale in 75 markets in the U.S."

Earlier this month, tw telecom reported growing its revenues for the 31st consecutive quarter as its second-quarter profit grew over the year-ago period.

The company was encumbered with $904.4 million in long-term debt and capital lease obligations as of June 30. However, in a Securities and Exchange Commission filing Aug. 16, tw telecom revealed repaying the $101.5 million term loan with cash and cash equivalents.

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