Ratings firm Standard & Poor's Corp. slashed Adelphia Communications
Corp.'s debt rating from 'double-B-minus' to 'single-B.'
'The downgrade is based on our assessment that the off-balance-sheet-debt
issue has materially weakened the company's overall financial profile,' S&P
credit analyst Richard Siderman said.
S&P added that Adelphia's financial flexibility is 'severely
S&P's action follows Adelphia's recent announcement that it had kept $2.3
billion in debt off its books and that it may be liable for $500 million in
unsecured bank debt from Adelphia Business Solutions, a spinoff that filed for
Adelphia is also the subject of an informal probe launched by the Securities
and Exchange Commission to look into some of its previously disclosed
Adelphia has not publicly disclosed the amount of its off-balance-sheet
issues, which could have an affect on its rating. S&P may further lower
Adelphia's rating if additional disclosure raises concern about covenants.
If, however, Adelphia provides clarity on the off-balance-sheet issues to the
satisfaction of S&P, its rating could be raised.
Even if the ratings are raised, S&P said, Adelphia's corporate rating is
unlikely be higher than a 'single-B-plus.'