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S&P: WideOpenWest notes CCC+
Standard & Poor's said it assigned a CCC+ rating and 6 recovery rating to the $1.02 billion of senior unsecured notes due 2020 to be co-issued by WideOpenWest Finance LLC and WideOpenWest Capital Corp.
The 6 rating indicates 0% to 10% expected recovery in a default.
The proceeds will be used, along with $1.92 billion from a senior secured term loan and $200 million of sponsor equity, to fund the acquisition of Knology Inc. and repay existing debt.
The B corporate credit rating and stable outlook remain unchanged and reflect a highly leveraged financial risk profile, including an aggressive shareholder-oriented financial policy.
The company's pro forma debt-to-EBITDA ratio is elevated at about 6.8x and the rating assumes that leverage will remain at 7.0x or lower over the next two years, S&P said.
The ratings also reflect its fair business risk profile characterized by the company's demonstrated ability to grow revenue and EBITDA through effective bundling of its products and its reputation for good customer service, the agency said.
These factors somewhat overshadow significant competitive pressures from financially stronger incumbent cable operators and telephone companies, S&P added.
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