Fitch rates Cablevision loan BB, debt CCC+

Fitch Ratings said it assigned a BB rating with a recovery rating of RR1 to the $2.4 billion senior secured bank facility entered into by CSC Holdings Inc., a wholly owned subsidiary of Cablevision Systems Corp. Fitch also assigned a B+ issuer default rating to Cablevision and a CCC+ rating with a recovery rating of RR6 to Cablevision's senior unsecured debt.

Fitch affirmed CSC Holdings' B+ issuer default rating, BB senior secured bank facility with a recovery rating of RR1, BB- senior unsecured debt rating with a recovery rating of RR3 and B senior subordinated debt with a recovery rating of RR5. The outlook is negative.

About $1.3 billion of the $1.4 billion of proceeds from the term loans included in the bank facility was used to refinance outstanding borrowings under CSC Holding' bank facility that was set to mature on June 30. Fitch noted that the new bank facility includes a provision to permit $3.1 billion of additional secured bank debt.

The agency said the ratings continue to reflect the expectation that CSC Holdings will fund a debt-financed $3 billion special dividend and the elevated leverage profile following the dividend, which Fitch estimated will increase to about 7.2x from 5.3x after the dividend. The ratings also reflect the ongoing concern related to the company's financial policy, the potential for the company to continue to place greater priority on returning capital to shareholders at the expense of bond holders and the ongoing possibility that company management will use distributions from the restricted group to fund other investments.

© 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.