S&P: Cequel new loan, notes

Standard & Poor's said it lowered the corporate credit rating on Cequel Communications Holdings I LLC to B from B+.

The agency also said it removed the ratings from CreditWatch, where they were placed with negative implications in May.

The outlook is stable.

S&P also said it lowered the rating on the company's non-extended senior secured credit facilities at Cequel Communications LLC to BB- from BB. The recovery rating on this debt remains at 1, reflecting 90% to 100% expected default recovery.

The agency also said it assigned a BB- rating and 1 recovery rating to the company's new senior secured credit facility, consisting of an $810 million term loan due December 2022 and a $350 million revolving credit facility due June 2020.

S&P also said it affirmed the B- rating on the company's 2020 and 2021 senior unsecured notes and revised the recovery rating on this debt to 5 from 6. The 5 recovery rating indicates 10% to 30% expected default recovery.

The agency also said it assigned a final BB- rating and 1 recovery rating to the company's $1.1 billion 5 3/8% senior secured notes due 2023. The 1 recovery rating reflects 90% to 100% expected default recovery.

The senior secured notes were originally issued by Altice US Finance I Corp., S&P said. With the close of the acquisition, the notes were contributed to Cequel Communications LLC and rank pari passu with the senior secured credit facilities, the agency said.

S&P also said it assigned a final B- rating and 5 recovery rating to the company's $300 million 7¾% senior notes due 2025 that were initially issued by Altice US Finance II Corp., and have been contributed to Cequel Communications Holdings I. The 5 recovery rating reflects 10% to 30% expected default recovery.

The agency also said it assigned a final CCC+ rating and 6 recovery rating to the company's $320 million 7¾% senior holding company notes due 2025 issued at Altice US Finance SA. The 6 recovery rating indicates 0 to 10% expected default recovery.

Despite high pro forma leverage, Cequel will continue to benefit from growth in HSD, voice and business customers over the next few years, S&P said.

While capital spending is expected to remain elevated in 2016 due to network investments, the company should continue to generate healthy free operating cash flow that could support leverage reduction to about 7x over the next 12 months, barring unexpected events, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.