Fitch affirms Time Warner Cable

Fitch Ratings said it affirmed the issuer default ratings and senior unsecured debt ratings of Time Warner Cable, Inc. and Time Warner Entertainment Co., LP at BBB, Time Warner Cable's short-term issuer default rating and commercial paper at F2 and Time Warner NY Cable, LLC's preferred membership units at BB+.

The outlook is stable.

Fitch's affirmation of the ratings recognizes the expected deleveraging of the company's balance sheet following the payment of a $10.9 billion debt-funded special dividend, which was related to Time Warner Cable's separation from Time Warner, Inc. Since the payment of the dividend and close of the separation transaction, Time Warner Cable has repaid over $2 billion of debt and reduced its leverage from 3.7 times as of March 31, 2009 to 3.18 times as of the last 12 months ended March 31.

The ratings reflect Time Warner Cable's strong competitive position as the second-largest cable multiple systems operator in the United States, strong subscriber clustering profile and growing revenue diversity owing to the success of its triple-play service offering and growing commercial business, the agency said.

Ratings concerns center on Time Warner Cable's ability to maintain its relative competitive position given the challenging competitive environment, growing residential revenues beyond its core triple-play service offering, continued expansion into the commercial services market, efficiently manage its cable plant bandwidth to maximize desirable high-definition content and continuing to balance investing in its business with improving its overall credit profile, Fitch said.

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