Moody's rates Kabel Deutschland notes Ba2

Moody's Investors Service said it assigned a definitive Ba2 rating to the €500 million senior secured notes due 2018 issued by Kabel Deutschland Vertrieb und Service GmbH & Co. KG, the operating subsidiary of Kabel Deutschland GmbH.

The outlook is stable.

The proceeds from the notes, together with its unrated €500 million of senior secured bank debt, will be used to redeem in full the outstanding €537 million payment-in-kind loans and reduce draw-downs under the company's existing revolving credit facility and a portion of term loan A under its existing bank facilities, Moody's said.

The refinancing of the loan will enable the company to begin dividend payments in line with its stated intention from 2011 to 2012 onward and will lead to reduced interest expense, as well as an extension of its debt maturity profile, the agency said.

The ratings reflect the senior secured position of the notes within the company's capital structure and the fact that the notes will benefit from the same security and guarantee package as the existing senior credit facilities in the group, Moody's said.

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