Moody's cuts Cablevision to SGL-4

Moody's Investors Service said it downgraded the speculative grade liquidity rating of Cablevision Systems Corp. to SGL-4 from SGL-2 following technical covenant violations and the cancelation of the proposed bank refinancing at CSC Holdings Inc.

The outlook was revised to negative from stable.

Moody's said it doubts the company can repay the $1.4 billion of debt outstanding under CSC's revolving credit facility from internal sources when it matures in June 2006, and uncertainty exists regarding when Cablevision will be able to refinance.

Cablevision's ratings continue to reflect high financial leverage, only modest coverage of interest and heightened competitive pressure from digital broadband service providers and Verizon.

Cablevision's ratings benefit, however, from the core cable operations' continued strong cash flow margins, the prospect of cash flow growth as penetration of internet and voice products increases and strong asset value associated with its technologically upgraded network and well-clustered subscriber base, the agency said.

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