Moody's rags on RCN


Moody's lowered RCN Corp but kept outlook for the money-losing seller of cable/telephone overbuilds as a "negative" Moody's said it lowered its debt ratings for Princeton, New Jersey-based RCN because the pace of the company's network construction and the addition of subscribers has been slower and costlier than expected.

RCN's former practice of buying regional Internet service providers to get their subscribers on its network has been unsuccessful, Moody's said. RCN's management has been "spread too thin'' and "past missteps,'' although they've been addressed, may hurt its long-term success. RCN's rating for $1 billion of senior secured bank credit facilities was cut to "B2'' from "B1'', while its rating for $2.03 billion in senior unsecured notes was cut to "Caa2'' from "B3.''
- John Higgins