Moody's: Knology outlook developing

Moody's Investors Service said it changed Knology, Inc.'s (B2 CFR) outlook to developing following the company's announcement of its $255 million cash acquisition of PrairieWave.

While the ultimate capital structure has not yet been determined, in Moody's view, Knology's corporate family rating could withstand an increase in leverage up to mid 5 times range, however, the ratings of individual debt instruments could change.

Once the details of the financing have been announced, Moody's said it expects to resolve the outlook and individual debt instrument ratings.

Moody's said it does not anticipate a negative outlook as a result of this transaction, adding that Knology's B2 corporate family rating reflects the company's lack of-scale, financial risk and concerns over competition, offset by the company's upgraded network, high penetration of multiple services and reasonable diversification of cash flow among its markets relative to other companies of similar size.

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