S&P rates Kabel Deutschland notes BB-

Standard & Poor's said that it assigned a BB- issue rating to the proposed €300 million of senior secured notes due 2018 to be issued by Kabel Deutschland Vertrieb und Service GmbH & Co. KG, a subsidiary of German cable operator Kabel Deutschland GmbH. The recovery rating on the proposed notes is 3, indicating meaningful (50%-70%) recovery.

The issue and recovery ratings on the proposed senior secured notes are based on preliminary information and are subject to the successful issuance of this instrument and the satisfactory review of the final documentation, the agency said.

Kabel Deutschland intends to use the proceeds from the proposed notes and new bank debt, together totaling at least €750 million, to repay its outstanding payment-in-kind loan due 2014 as well as drawings under its revolving credit facilities.

The proposed €300 million of senior secured notes will benefit from the same security and guarantees as Kabel Deutschland's existing senior secured bank debt and that the two pieces of debt will rank pari passu in right and order of payment by way of an intercreditor agreement, S&P said.

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