S&P gives Knology loan B+

Standard & Poor's said it assigned its issue-level and recovery ratings to Knology Inc.'s proposed $770 million senior secured credit facility.

The facility consists of a $50 million revolver, a $150 million term loan A and a $570 million term loan B, the agency said, noting that it rated the bank loan B+ with a 3 recovery rating.

At the same time, the agency said it affirmed its B+ corporate credit rating on Knology.

The outlook is stable.

The company plans to use the proceeds of the new facility to fund the $165 million purchase price for incumbent cable operator Sunflower Broadband, refinance about $577 million of existing debt, and pay related fees and expenses, the agency noted.

"Despite the modest increase in leverage because of the transaction to about 4.4x from 4.1x as of June 30, 2010," said S&P credit analyst Allyn Arden, "we expect credit measures to remain supportive of the current rating in the intermediate term."

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