More on the TWTC-Xspedius Merger

The S&P doesn'yt like it. "Time Warner Telecom announced on July 27 it will buy the Colorado-based CLEC for $531.5 million, including a cash component of $212 million. After the deal goes through, Time Warner Telecom will have about $1.3 billion in debt." That's more debt than XO, which sits at about $750M. "Time Warner Telecom’s markets will expand from 44 to approximately 75 – including the addition of Baltimore, Md., Las Vegas and Washington, D.C. – and its on-net buildings will go up from 6,000 to 7,000." And most telling of all: "The company's business plan is also characterized by high capital requirements that continue to defer its ability to generate positive net free cash flows. Time Warner Telecom is also highly leveraged.” OUCH!