Moody's rates San Juan Cable loans B2, Caa2

Moody's Investors Service said it affirmed the B3 corporate family and probability of default ratings for San Juan Cable, LLC, and assigned a B2 (LGD 3, 34%) rating to its proposed first-lien credit facility and a Caa2 (LGD 5, 87%) rating to its proposed second-lien term loan.

The outlook remains stable.

The proposed transaction consists of a $25 million first-lien revolver due May 2016, a $345 million first-lien term loan due May 2017 and a $150 million second-lien term loan due May 2018, Moody's said.

The company intends to use, together with balance sheet cash, to repay the company's existing debt and to fund a $25 million distribution to its equity holders, the agency said.

Pro forma for the transaction, leverage is expected to rise to about 7.2x from about 7x, Moody's said.

But the B3 corporate family rating can tolerate the increase in leverage, the agency said, and the company is expected to generate continued positive free cash flow, even with an increase in cash interest.

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