Moody's rates Kabel BW notes Caa1

Moody's Investors Service said it assigned a prospective B2 senior implied rating to Kabel BW Holdings GmbH and assigned a prospective Caa1 rating to the company's proposed €170 million issuance of senior subordinated floating-rate notes due 2015.

The outlook is stable.

Kabel BW currently plans to issue €170 million in senior subordinated floating-rate notes due 2015 as a part of a refinancing package which also includes up to €676 million of senior secured bank facilities, of which only €586 million will be drawn at the close of the transaction.

Moody's said the ratings take into consideration Kabel BW's high leverage at 6.5x total debt/EBITDA before adjusting for financial leases and excluding a subordinated shareholding loan in the amount of €105.7 million after the transaction close; strong competition for multi-channel television services from free-to-air satellite; and competition from NL4 operators for end-customers and housing associations to provide basic cable services.

The ratings positively reflect Kable BW's scale as the third largest cable operator in Germany and its strong regional position in Baden-Wurttemberg with a market share of 58% and the region's relatively robust economic fundamentals within Germany, the agency said.

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