Cogent Communications Group Inc. on Monday announced a proposal to sell $150 million in senior secured notes.
Washington, D.C.-based Internet service provider Cogent revealed it planned to use the proceeds for general corporate purposes and/or repurchases of Cogents common stock or its convertible notes or a special dividend to Cogents stockholders.”
Cogent said it planned to sell the notes, due in 2018, to qualified institutional buyers in a private placement.
In a report today, Moodys Investors Service assigned a Caa1 corporate family rating (CFR) and a Caa1 probability of default rating (PDR) to Cogent Communications, LLC.”
Moodys defines corporate family ratings as opinions of a corporate familys ability to honor all of its financial obligations.” Moodys defines a PDR as a corporate family-level opinion of the relative likelihood that any entity within a corporate family will default on one or more of its debt obligations.”
Cogents Caa1 corporate family rating reflects its high leverage, small scale and the highly competitive environment in which it operates, a well as the capital intensity of the industry,” Moodys stated.
Moodys also assigned a rating of B2 to Cogents proposed debt offering. Moodys assigns a B rating to obligations that are considered speculative and are subject to high credit risk.”
Cogent sells Internet access and other IP services to small and medium-sized businesses, communications providers and other organizations that require large amounts of bandwidth in Europe and North America.
Shares of Cogent (CCOI) were trading this morning at $13.83 on the Nasdaq.
For the nine months ending Sept. 30, 2010, the company posted service revenues of nearly $194 million. The company served roughly 24,000 customer connections as of Sept. 30.