Choice One Communications continued to drift downward into the 64-663/4 context, a week after the loans took a 10 point plunge following a conference call between lenders and their consultant. Speculation on the drop continues to indicate that the banks' consultant revised projections for the company, although this could not be confirmed because of the private nature of the call. But the debt sank from the 77 range into the 66-70 range at that time (LMW, 3/29).
Although Choice One reported that it is currently in compliance with its covenants, the company stated in its recently filed 10-K that it is "reasonably likely" that without covenant relief or modification the company will be in breach of one or more of its covenants during 2004. Choice One will pursue changes to its operating plans, will look to discussions with its lenders for waivers or modifications, and will evaluate other possible actions to remedy this situation, according to the filing.
Choice One had about $399 million in senior credit facilities outstanding at the end of last year. Wachovia Securities leads the bank deal. Officials at Wachovia declined comment. Lisa Schnorr, director of investor relations and corporate communications for Choice One, could not be reached by press time.