TEXT-S&P cuts Broadview Networks Holdings Inc to 'D'

Rating Action
On July 23, 2012, Standard & Poor's Ratings Services lowered our corporate
credit rating on wireline operator Broadview Networks Holdings Inc. to 'D'
from 'CC'.

We also affirmed the 'C' issue-level rating on the company's secured notes.
The recovery rating on the notes remains a '5', indicating expectations for
modest (10%-30%) recovery prospects in the event of a payment default.

This action follows the company's announced extension on its revolving credit
facility. We expect to lower the issue-level rating on the notes to 'D' once
the company files for bankruptcy, or if it misses the Sept. 1, 2012 maturity
payment on the notes.

Rationale
Broadview has obtained an extension of its revolving credit facility maturity
date to Sept. 5, 2012 from Aug. 1, 2012. We consider this extension tantamount
to a default under our criteria. We base this view on the fact that Broadview
has already announced an agreement with two-thirds of its noteholders to
restructure their debt, which it plans to implement through a Chapter 11
bankruptcy filing. Moreover, the company has obtained a commitment letter from
CIT, its revolving credit lender, to roll the existing revolving facility into
a debtor-in-possession (DIP) financing, contingent on a bankruptcy filing by
Broadview by Sept. 5.

Upon the company's completion of its restructuring, we would expect to raise
the corporate credit rating on Broadview. While we will evaluate the company's
business plan and financial profile as it emerges, we do not anticipate that
the corporate credit rating would be any higher than 'B', given the
significant competitive challenges facing the company, our expectations for
limited near-term cash-generating ability, and leverage, which we estimate,
pro forma for the proposed debt restructuring, to be about 3x.

Ratings List

Downgraded
To From
Broadview Networks Holdings Inc.
Corporate Credit Rating D/-- CC/Negative/--

Ratings Affirmed

Broadview Networks Holdings Inc.
Senior Secured C
Recovery Rating 5