S&P cuts Liberty Cablevision of Puerto Rico, rates loan B

S&P said it assigned its B issue-level rating and 3 recovery rating to Liberty Cablevision of Puerto Rico LLC's proposed $85 million first-lien term loan B-3 due 2022.

At the same time, the agency downgraded the existing first-lien issue-level ratings to B from B+ and revised the recovery rating to 3 from 2 due to lower recovery prospects for first-lien lenders stemming from more first-lien claims at default.

The company plans to use the proceeds to repay $85 million in second-lien debt.

The 3 recovery ratings reflect an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in a simulated default scenario.

The CCC+ issue-level rating and 6 recovery rating on the second-lien debt (0%-10%; rounded estimate: 0%) are unchanged as S&P expects the majority of enterprise value to be consumed by the first-lien debt in a simulated default.

The B corporate credit rating and stable outlook are also unchanged as this is a leverage-neutral transaction, S&P explained.

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