Moody’s: Mediacom loan Ba2

Moody's Investors Service said it assigned a Ba2 (LGD 3) rating to the proposed $500 million senior secured term loan K to Mediacom Illinois LLC, a wholly owned subsidiary of Mediacom LLC and its parent Mediacom Communications Corp.

The proceeds will be used to pay off the company's existing term loan F and 7¼% unsecured notes.

Mediacom Illinois also will extend the maturity of its revolving credit facility to 2022, which was set to expire in 2019, the agency said, and increase the revolver capacity by $7.5 million to $370 million.

The revolver has a Ba2 (LGD 3) rating, Moody’s said.

Mediacom’s Ba3 corporate family rating and positive outlook are unchanged.

The proposed transaction is credit positive as it extends the maturity profile of the company's capital structure and decreases annual interest expense by about $11 million, the agency explained.

The ratings reflect the company’s moderate leverage of about 4.1x debt-to-EBITDA ratio, highly competitive market with below average penetration rates and video subscriber losses and burdensome cost structure of its video product that is capital intensive, Moody’s said.

This rising cost structure is offset by the company's broadband and commercial offering, which demonstrate high growth and high profit, which drives earnings and cash flows higher, the agency said.

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