Moody's assigns WideOpenWest bonds Caa1

Moody's Investors Service said it assigned a Caa1 rating to the proposed $100 million senior unsecured bonds of WideOpenWest Finance, LLC.

The issuance is an add-on to WideOpenWest's existing 10¼% senior unsecured bonds due July 2019.

The company expects to use proceeds to repay revolver borrowings.

Moody's said the transaction would add long-term, higher cost debt to the capital structure and likely delay the trajectory for a decline in both debt and leverage.

The agency expects WideOpenWest to rely on EBITDA growth rather than debt repayment to lower leverage over the next couple of years, a negative given the company's very high leverage of about 7 times debt-to-EBITDA.

However, the transaction would favorably boost liquidity by increasing revolver availability, and the expected repricing of the first-lien term loan should more than offset the higher interest on the proposed bonds relative to revolver borrowings.

Moody's also upgraded the first-lien bank debt to Ba3 from B1. The transaction would reduce first-lien bank debt and increase bonds, thus increasing the cushion of junior capital that would absorb losses for first-lien lenders, the agency said.

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