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S&P affirms Knology
Standard & Poor's said it affirmed Knology Inc.'s B corporate credit rating and B senior secured credit facility rating with a recovery rating of 4 following the company's announcement that it is increasing its term loan B by $59 million to a total of $609 million and will acquired Graceba Total Communications Inc. for $75 million.
The outlook is stable.
Bank proceeds combined with $16 million of cash will be used to fund the acquisition, which is expected to close in the first quarter of 2008.
The agency said the affirmation reflects the fact that the transaction is leverage neutral. Pro forma debt to EBITDA is about 4.8 time, which supports the current rating level, and the acquisition will immediately add to net free cash flows and, while increasing Knology's revenue-generating units by only 4%, will allow the company to expand its southeast footprint to Alabama, providing some degree of market diversity.
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