S&P lowers Cablevision, CSC

S&P said it lowered the corporate credit rating on Cablevision Systems Corp. to B from BB- and removed all of the ratings from CreditWatch, where they were placed with negative implications in September 2015.

The agency also said it lowered the ratings on CSC Holdings LLC's existing unsecured debt to B- from BB and revised the recovery rating to 5 from 2.

The 5 recovery rating indicates 10% to 30% expected default recovery.

This brings the unsecured issue-level ratings in line with the ratings on the unsecured debt raised in October 2015 at Neptune Finco Corp., which is now merging with and into CSC Holdings, S&P said.

The agency also said it lowered the ratings on the company's unsecured subordinated debt to CCC+ from B. The recovery rating remains at 6, indicating 0 to 10% expected default recovery.

The outlook is stable.

Altice will use about $8.6 billion in proceeds from debt raised in October 2015, along with about $3.3 billion in equity and cash on the balance sheet, to fund the $10 billion equity purchase price and refinance credit facilities at CSC Holdings and Newsday, S&P said.

The downgrade follows the close of Altice's mostly debt-financed acquisition of CSC, pushing pro-forma leverage to about 7.5x from 4.2x for the 12 months ended March 31, the agency said.

Although the company could reduce leverage to less than 7x over the near term, the agency said it believes there is uncertainty regarding the achievement of planned cost savings and the longer-term impact that cost cutting could have on the company's market share.

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