Moody's puts Crown Castle unit on downgrade review

Moody's Investors Service on Friday lowered one debt rating and placed the other ratings of Crown Castle Operating Co. on review for possible downgrade.

The primary operating subsidiary of Crown Castle International Corp., Houston-based Crown Castle Operating Co. rents communications antenna space to wireless operators on towers throughout the United States, and has some operations in Canada.

Moody's lowered the company's speculative grade liquidity rating to "SGL-4" from "SGL-2."

Moody's also said it is reviewing the "Ba3" corporate family rating, the "Ba3" probability of default, and the "Ba3" ratings on Crown Castle's senior secured credit facilities.

The ratings review and downgrade reflect continuing turmoil in the credit markets and the increased probability that the company will not be able to extend its revolving credit facility beyond its January 2009 maturity, forcing it to repay the roughly $160 million in outstanding debt with cash on hand, Moody's said.

If Crown Castle is able to repay all of its outstanding revolving credit by January 2009, the company will still have enough cash to fund day-to-day operations, but will have difficulty to continue its capital expenditure program, which involves building and acquiring new towers, Moody's said.

Moody's noted that Crown Castle may not formally request an extension of its line of credit from its bank until Nov. 16, and the ratings agency will look to reassess the company's ratings and liquidity position leading up to the credit line's maturity in January.

Crown Castle's long term debt ratings and the probability of default may be further pressured by its continuing weak liquidity and the pending debt maturities starting in December 2009, Moody's said.

Shares of Crown Castle International fell $1.60, or 8 percent, to close at $18.50. They earlier hit a new year low of $16.97. Shares have traded in a 52-week range of $19.13 to $43.24.