S&P lowers Cable & Wireless

Standard & Poor’s said it lowered the long-term corporate credit rating on Cable & Wireless Communications plc to BB- from BB.

The agency also said it affirmed the company’s B short-term rating.

S&P also said it lowered the rating on Sable International Finance Ltd.’s senior secured notes due 2020 to BB- from BB, along with Cable & Wireless International Finance’s senior unsecured notes to B from B+.

The agency said it have removed all of the ratings from CreditWatch, where they were placed with negative implications in November 2014.

S&P also said it raised the long-term and issue-level ratings on Columbus International Inc. to BB- from B and removed them from CreditWatch, where they were placed with positive implications in November 2014.

The downgrades follow the Columbus acquisition, which has weakened the company’s financial risk profile, which is now considered highly leveraged.

The ratings consider a $690 million issuance of new debt and the refinancing of a revolving credit line for $570 million, S&P said.

The agency said it is adjusting Cable and Wireless’ debt to reflect Columbus’ shareholders’ potential exercise of a $1.1 billion put option.

The agency said it expects Cable & Wireless’ proportionate debt-to-EBITDA ratio to exceed 8x in fiscal 2016 and remain at more than 5x for the following two years.

The upgrade on Columbus reflects a view that the company is a core subsidiary for Cable & Wireless as it is very unlikely to be sold because it strengthens Cable and Wireless’ position in the Caribbean market, S&P said.

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