Moody’s rates Mediacom loans Ba2

Moody's Investors Service said it assigned a Ba2 (LGD3) rating to MCC Iowa LLC's (borrower of Mediacom LLC whose parent is Mediacom Communications Corp. [MCC]) newly issued $900 million senior secured term loan N due 2024 and senior secured term loan A-2 facility due March 2023, which was upsized to $250 million, with an incremental draw of $60 million.

All financial maintenance covenants remain consistent with the existing credit agreement.

Financing proceeds, totaling roughly $1.1 billion, will be used to pay off the existing $800 million term loan K due 2024 (at MCC Iowa LLC) and redeem the $300 million in 6.375% senior unsecured notes due 2023 at Mediacom Broadband LLC.

The redemption of the notes will be executed on April 2, at which time the agency said it will withdraw the B1 LGD-6 rating on the instrument, as well as the Ba2 LGD-3 rating on the term loan K.

All other ratings are unchanged, including the Ba2 corporate family rating, Ba2 probability of default rating and the Ba2 LGD-3 ratings on the remaining senior secured bank credit facility.

The outlook remains positive.

“The financing is credit positive,” Moody’s said in a news release.

“The refinancing of the term loan A-1 extends the maturity from 2021 to 2023 and lowers interest expense with reduction in Libor and base rates by approximately .25%. The company will also benefit from lower interest expense with the redemption of the notes which have a relatively high coupon.”

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