S&P may lower Cox Enterprises

Standard & Poor's said it placed its ratings on Cox Enterprises Inc. and all related entities on CreditWatch with negative implications.

The action follows Cox Enterprises' announcement of its proposal to acquire the outstanding publicly held 38% minority interest in 62%-owned subsidiary Cox Communications Inc., a major cable TV system operator, for cash consideration of $7.9 billion, including fees and expenses.

Assuming the transaction is completed as described, the corporate credit rating on Cox Enterprises, which is analyzed on a consolidated basis with Cox Communications, 62%-owned Cox Radio Inc., and non-public auto auction, newspaper, and TV broadcasting operations, would be lowered to BBB- from BBB. The senior unsecured debt of Cox Enterprises would be lowered to BBB- or BB+, depending on the resulting placement of debt within the consolidated capital structure. The senior unsecured debt of Cox Communications and Cox Radio Inc. would be lowered to BBB- from BBB. The commercial paper ratings on Cox Enterprises and Cox Communications would be lowered to A-3 from A-2.

The downgrades would be based on the increased financial risk of Cox Enterprises and its subsidiaries from the substantial increase in consolidated leverage to a level well above 5x debt to EBITDA, compared with the current measure closer to 3x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.