Oct. 27, 2009 (Business Wire) -- Fitch Ratings has downgraded the ratings of FairPoint Communications, Inc. (FairPoint) as follows:

--Issuer Default Rating (IDR) to 'D' from 'C'.

--Senior secured revolving credit facility to 'CC/RR3' from 'B-/RR1';

--Senior secured term loan due 2014 to 'CC/RR3' from 'B-/RR1';

--Senior secured term loan due 2015 to 'CC/RR3' from 'B-/RR1';

--Senior secured delayed-draw term loan due 2015 to 'CC/RR3' from 'B-/RR1';

--13.125% senior unsecured notes due April 2, 2018 (New Notes) to 'C/RR6' from 'C/RR4';

--13.125% senior unsecured notes due April 1, 2018 (Old Notes) to 'C/RR6' from 'C/RR4'.

Fitch's downgrade reflects the company's Oct. 26, 2009 announcement that it has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. FairPoint also announced a restructuring plan with the lenders holding more than 50% of its approximately $2 billion of outstanding secured debt. The restructuring plan calls for the lenders to receive a new $1 billion secured term loan, and 98% of the company's newly issued common stock. If the unsecured creditors, including the holders of the Old Notes and the New Notes, agree to the restructuring plan, they will receive 2% of the common equity and warrants to purchase up to 5% of the new common stock. If the unsecured creditors do not vote as a class to accept the plan, no distributions under the plan will be received. In aggregate, there are approximately $570 million in outstanding senior unsecured notes. Under the terms of the plan, the company will not pay interest or principal on its pre-petition debt while in Chapter 11.

The ratings may be withdrawn after 30 days have elapsed following a default.

Additional information is available at 'www.fitchratings.com'. The issuer did not participate in the rating process other than through the medium of its public disclosure.

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