TEXT-S&P: Ratings same after Cequel Comm Hldgs $750M sr secd add-on

Thu Dec 13, 2012 9:03am EST

Dec 13 - Standard & Poor's Ratings Services today said its 'B-' issue-level rating and '6' recovery rating on Cequel Communications Holdings I LLC's unsecured notes remains unchanged, following the company's $750 million add-on to its unsecured notes due 2020. The '6' recovery rating indicates our expectation for negligible (0%-10%) recovery in the event of a payment default.

"Proceeds from the add-on will be used to repay $160 million of borrowings under the company's revolving credit facility, as well as for tender for $500 million of 8.625% senior unsecured notes due 2017," said Standard & Poor's credit analyst Catherine Cosentino.

Standard & Poor's 'B+' corporate credit rating and stable outlook on Cequel also remain unchanged, as do the 'BB-' issue-level rating and '2' recovery rating on subsidiary Cequel Communications LLC's secured credit facilities and the 'B-' issue-level rating and '6' recovery rating on Cequel's 8.625% senior unsecured notes due 2017.

Pro forma for the current transaction and the $500 million of incremental debt issued to fund the buyout by BC Partners and the Canada Pension Plan Investment Board, the company's consolidated leverage was about 6.4x, based on EBITDA for the 12 months ended Sept. 30, 2012. This ratio remains within the parameters of the current rating, given our assessment of the company's "satisfactory" business risk profile and "highly leveraged" financial risk profile.

RATINGS LIST

Ratings unchanged

Cequel Communications Holdings I LLC

Corporate credit rating B+/Stable/--

$1.25 bil. sr unsecured notes due 2020

Senior unsecured B-

Recovery rating 6

Cequel Communications LLC

$500 mil. revolver due 2017

Senior secured BB-

Recovery rating 2

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