The downgrades followed the company's decision to defer payment of about $91 million in interest due on Apr. 1 on about $1.7 billion of debt and suspend the quarterly dividend payment on its preferred stock, says S&P analyst Michael Tsao. The company indicated that it may seek Chapter 11 bankruptcy protection if it is unable to restructure its debt. Tulsa, Okla.-based Williams Communications had total debt outstanding of about $5.9 billion at the end of 2001.
The ratings of Williams Communications' bank loan and other debt issues will be lowered to 'D' on the default of interest payments, a bankruptcy filing, or a restructuring, the last of which would be considered tantamount to default by Standard & Poor's. From Standard & Poor's RatingsDirect