S&P rates Nara Cable notes B

Standard & Poor's said that it assigned a B issue rating to the proposed €300 million of senior secured notes due 2018 to be issued by the special-purpose vehicle Nara Cable Funding Ltd.

Nara Cable Funding is borrowing on behalf of Cableuropa SAU (B/stable). The proposed issuance is a tap to the €700 million of senior secured notes issued in October 2010.

Nara Cable Funding will lend the proceeds of the proposed notes, if issued successfully, to Cableuropa through a new facility, SPV Tranche 2. The proceeds will be used to pay down Cableuropa's existing senior secured debt facilities.

S&P assigned an issue rating of B to the proposed loan facility, in line with the corporate credit rating on Cableuropa. S&P also assigned a recovery rating of 3 to the proposed loan facility, reflecting the expectation of meaningful (50%-70%) recovery for the lenders in the event of a payment default.

The ratings consider Cableuropa's solid market positions and the cable sector's significant barriers to entry that result from the industry's high capital intensiveness, the agency noted.

The issue and recovery ratings on the secured SPV Tranche 1 facility and proposed SPV Tranche 2 facility reflect the estimated value available and accessible to the respective creditors, the likelihood of insolvency proceedings being adversely influenced by Cableuropa's Spanish domicile, the high proportion of senior secured debt instruments in the capital structure and the weak security package, the agency said.

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