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S&P ups Midcontinent Communications, rates notes B
Standard & Poor’s said it raised its corporate credit rating on Midcontinent Communications to BB- from B+. The outlook is stable.
At the same time, S&P assigned a B issue-level rating and 6 recovery rating to the proposed $300 million of senior notes due 2023. The 6 recovery rating indicates an expectation for negligible (0%-10%) recovery in the event of payment default.
S&P also raised its issue-level rating on the company’s senior secured first-lien debt to BB from BB-. The 2 recovery rating is unchanged and indicates an expectation for substantial recovery (70%-90%; upper end of the range) for lenders in the event of a payment default.
S&P raised its issue-level rating on the existing unsecured debt to B from B-. The 6 recovery rating is unchanged.
“Notwithstanding the increase in leverage to around 5x from 3x because of the debt-financed distribution to the partnership, the ratings upgrade is based on our view that the agreement between Comcast and Midcontinent to waive their buy-sell provisions until 2020 removes the potential risk that Midcontinent could buy Comcast’s stake in the near term,” said S&P credit analyst Eric Nietsch in a news release.
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