Fitch rates Unitymedia notes B, BB+; loans BB+

Fitch Ratings said it assigned Unitymedia GmbH a long-term issuer default rating of B+.

The outlook is stable.

The agency also assigned a B/RR5 rating to Unitymedia’s senior notes, BB+/RR1 ratings to Unitymedia Hessen GmbH & Co. KG’s revolving credit facilities and a BB+/RR1 rating to Unitymedia Hessen and Unitymedia NRW GmbH’s co-issued senior secured notes.

Fitch said the ratings are supported by Unitymedia’s strong operating profile including its strong challenger position in consumer and small business broadband markets, solid growth, high earnings and cash flow margins.

These factors are offset by an industry structure that remains fragmented with the company’s covering around a third of the country and limited prospects of further consolidation, along with financial leverage which is relatively high.

Fitch said its rating case envisages Fitch-defined net-debt-to-EBITDA remaining stable at around 5.5 times, a level that is consistent with the rating given the strength of the underlying cash flow and operating profile.

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