(The following statement was released by the rating agency)
Oct 11 - Standard & Poor's Ratings Services today assigned its 'B-'issue-level rating and '6' recovery rating to Cequel Communications Escrow ILLC's proposed $500 million of senior unsecured notes due 2020, with CequelCommunications Escrow Capital Corp. as co-issuer. The '6' recovery ratingindicates expectations for negligible (0%-10%) recovery in the event of apayment default. The company will use proceeds to fund a portion of the purchaseprice for the acquisition of cable-TV operator Cequel Communications HoldingsLLC by BC Partners and the Canada Pension Plan Investment Board. Upon completionof the transaction, Escrow I and Escrow Capital will be merged into CequelCommunications Holdings I LLC (Cequel) and Cequel Capital Corp., respectively.Our 'B+' corporate credit rating and stable outlook on Cequel remain unchanged,as does the 'BB-' issue-level rating and '2' recovery on subsidiary CequelCommunications LLC's securedcredit facilities, and the 'B-' issue-level rating and '6' recovery rating onCequel's existing unsecured notes.
Pro forma for the transaction, including redemption of the preferred interestat parent Cequel Communications Holdings LLC, leverage modestly increases to6.3x from 5.8x, based on performance for the 12 months ended June 30, 2012.This result remains within the parameters of the current rating, given ourassessment of the company's "satisfactory" business risk profile and "highlyleveraged" financial risk profile under our criteria.
For the credit profile, see the rationale published on July 12, 2012 onRatingsDirect. For the full recovery analysis, see the recovery report to bepublished shortly on RatingsDirect.
RELATED CRITERIA AND RESARCH
-- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
-- U.S. Telecom And Cable Companies' Maturities Are Manageable, ButLower-Rated Issuers Face Some Liquidity Challenges, July 23, 2012
-- A Matter of Policy: U.S. Telecom Companies Maintain High DividendPayouts, But For How Long?, May 30, 2012
-- A Matter of Policy: U.S. Cable And Satellite-TV Companies Ratchet UpShareholder Payouts, May 16, 2012
-- Top 10 Investor Questions: U.S. Telecom And Cable Industries, May 10,2012
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
Cequel Communications Holdings I LLC
Corporate Credit Rating B+/Stable/--New RatingCequel Communications Escrow I LLCCequel Communications Escrow Capital Corp. (co-issuer)
$500 Mil. Sr. Unsec. Notes Due 2020 B-
Recovery Rating 6
Complete ratings information is available to subscribers of RatingsDirect onthe Global Credit Portal at
. All ratings affectedby this rating action can be found on Standard & Poor's public Web site at. Use the Ratings search box located in the leftcolumn.(New York Ratings Team)