OREANDA-NEWS. S&P Global Ratings today assigned its 'B' issue-level rating and '3' recovery rating to Los Angeles-based competitive local exchange carrier U. S. TelePacific Holdings Corp.'s senior secured notes due 2021. The '3' recovery rating indicates our expectation for meaningful (50%-70%; lower half of the range) recovery of principal in the event of payment default.

The company will use proceeds from the notes offering to partly finance its acquisition of DSCI Corp., which closed on Sept. 19, 2016. DSCI is a network services business that provides hosted communications, managed IT, and connectivity solutions.

As a result of the transaction, we expect that adjusted debt to EBITDA will increase modestly to around the mid-6x from the low-6x area as of June 30, 2016, although the increase in leverage is not sufficient for us to revise our financial risk assessment or the 'B' corporate credit rating on TelePacific.