TEXT-S&P revises NTELOS recovery rating to '4'

Tue Aug 14, 2012 1:12pm EDT

Aug 14 - Standard & Poor's Ratings Services said today that said today that
it revised its recovery rating on the  senior secured debt at regional wireless
carrier NTELOS Holdings Corp. (NTELOS) unit NTELOS Inc. to '4' from
'3'. However, the change in the recovery rating does not affect either the 'BB-'
issue-level rating on NTELOS' secured debt or the 'BB-' corporate credit rating.
The '4' recovery rating indicates our current expectation for average (30% to
50%) recovery in the event of a payment default. (For the complete corporate
credit rating rationale, see the full analysis on NTELOS, published June 22,
2012, on RatingsDirect.)

The change in the recovery rating reflects our revised approach to recovery 
analysis of wireless carriers in our default scenarios. We estimate wireless 
enterprise value in a default scenario by using the greater of a multiple of 
projected bankruptcy emergence-level EBITDA or a discrete asset value, based 
on the book value of spectrum and a discounted value of network assets. In 
NTELOS' case, the cash flow multiple approach results in the greater 
valuation. As part of the revision in our methodology, we have also lowered 
our projected distressed EBITDA multiple for NTELOS to 4x from 5x to account 
for the company's limited geographic footprint as well as the substantial, and 
growing portion of revenues derived from its wholesale contract with Sprint. 
Our simulation incorporates a default occurring in 2015, reflecting a decline 
in revenues under the Sprint wholesale agreement (either from non-renewal or 
renewal under substantially less favorable terms) as well as a substantial 
erosion of NTELOS' retail subscriber base. (For the full recovery analysis, 
see the recovery report on NTELOS, to be published shortly on RatingsDirect, 
as well as the commentary on the revised valuation approach for wireless 
carriers, also to be published shortly.)

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RATINGS LIST

NTELOS Holdings Corp.
 Corporate Credit Rating         BB-/Stable/--

Ratings Unchanged; Recovery Rating Revised

NTELOS Inc.
                                 To            From
 Senior Secured                  BB-           BB-
   Recovery Rating               4             3


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
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