UbiquiTel's bank debt was stronger last week, quoted wide in the 70-75 range. Two weeks ago the name had been quoted with wide bid/ask spreads in the 60s, according to LoanX. No trades could be confirmed. UbiquiTel is a Sprint PCS Group affiliate and all the affiliates are for the most part illiquid, noted one trader. The company recently achieved its first quarter of positive EBITDA, clocking in at $100,000. The reason for the tick up in the credit could not be determined, but in general wireless names have been inching up over the past month.
UbiquiTel now has $230 million outstanding on its credit facility with a $50 million untapped revolver and a $110 million "A" term loan maturing in 2007. The company also has a $120 million "B" piece expiring in 2008. BNP Paribas leads the credit facility. Earlier this year, UbiquiTel amended its bank debt in order to commence a debt exchange, which lowered the total amount of the company's debt and pre-paid about $15 million of its bank debt. But in a recent credit report, Moody's Investors Service noted that due to expectations of slower growth and reduced profitability, it is very likely that UbiquiTel will be in violation of some of its covenants in 2004.
Sprint affiliate credit watchers note it is important to see whether Sprint will be held responsible for causing bankrupt iPCS, another affiliate, to fail to satisfy its current debts and future obligations to its creditors. Creditors of iPCS have asked the bankruptcy court for permission to sue Sprint and the outcome is likely to have ramifications on other Sprint affiliates. One market player queried, "There is a real question as to Sprint. Are they going to save these guys or not?" James Volk, UbiquiTel's cfo, could not be reached by press time.