S&P ups Liberty Communications Of Puerto Rico

S&P said it upgraded Liberty Communications Of Puerto Rico LLC to B+ from B and removed the rating from CreditWatch with positive implications where it was placed on Oct. 10, 2019. Liberty completed the acquisition of AT&T’s wireless and wireline operations in Puerto and the U.S. Virgin Islands for $1.95 billion on Oct. 31.

Concurrently, S&P assigned B+ ratings to debt previously issued to fund the acquisition of the assets.

“The upgrade primarily reflects improved credit metrics enabled by a significant equity contribution, combined with robust growth in LCPR’s cable business. We estimate that the acquired business has a modestly deleveraging effect given that it was funded at a roughly 4x debt-to-EBITDA multiple, thanks to a roughly $650 million equity contribution,” S&P said in a press release.

The agency assigned a stable outlook. “The stable outlook reflects our view that there is a downside cushion in the rating given the demonstrated resiliency of the cable and wireless businesses, but that an upside is also limited over the next year due to uncertainty around the integration and longer-term financial policy,” S&P said.

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