S&P: Cablevision on watch

Standard & Poor's said it placed its long-term ratings for Cablevision Systems Corp. on CreditWatch with negative implications, including the B+ senior unsecured debt and BB corporate credit ratings.

The company's short-term B-2 rating was placed on developing watch on a lack of information on the company's liquidity, S&P added.

The agency also said it placed its ratings on Cablevision's Rainbow Media Enterprises Inc. (RME) unit on CreditWatch with negative implications, including the BB+ secured bank loan, B+ senior unsecured debt, B+ subordinated debt and BB corporate credit rating.

These actions follow the announcement that the Dolan Family Group has proposed to acquire Cablevision and spin off the non-cable assets to existing shareholders, the agency added.

The watch for Cablevision reflects the fact that pro forma for the Dolan proposal debt to EBITDA for 2005 would be approximately 9.6 times, compared with S&P's prior expectation that it could fall to the mid-5 times area because of ongoing cable cash flow growth, the agency said.

With the spin off of the Rainbow Media Holdings assets, Cablevision as a "pure play" cable operator will actually improve its business risk profile, S&P noted, while RME facing the dual impact of a significantly weaker standalone business position coupled with its highly aggressive leverage suggests the potential for a significant diminution of its credit quality.

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