Moody's rates Kabel Deutschland

Moody's Investors Service said it assigned a prospective B1 senior implied rating to Kabel Deutschland GmbH and assigned a prospective B3 rating to the company's proposed €700 million issuance of senior notes due 2014.

The outlook is stable.

Moody's said the ratings take into consideration Kabel's high lease adjusted leverage levels, the low average-revenue-per-user and price-sensitive customer base that generally characterizes the German TV industry, the fragmented nature of Kabel's cable TV network, strong on-going competition for multi-channel television services from free-to-air satellite and continued signal substitution risk from NL4 providers.

Pro forma for the pending transaction, Kabel's debt leverage is high with debt to EBITDA as of Dec. 31, 2003 of approximately 5.6x.

Moody's said the ratings also reflect Kabel's current dependence on Deutsche Telekom for a number of services.

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