New York, May 26, 2015 -- Moody's Investors Service has placed the ratings for Charter Communications Inc. ("Charter") on review for upgrade, including Charter's Ba3 Corporate Family Rating (CFR), Ba3-PD PDR and (P)B1 shelf rating following the announcement that Charter will purchase Time Warner Cable, Inc. ("TWC") for approximately $80 billion. Based on the proposed capital structure, Moody's has placed the Baa3 rating on the secured debt at Charter Communications Operating, LLC ("CCO") on review for downgrade. In addition to the acquisition of Time Warner Cable, Charter will also purchase Bright House Networks ("Bright House") for approximately $10 billion. The transactions value TWC and BHN at approximately 9.1x and 7.6x EV/EBITDA respectively. The review for upgrade will focus on the substantial scale benefits and cost synergy opportunity for the post-close entity, as well as the execution risk required to achieve the potential savings. The high proportion of equity consideration in the two deals (approximately $41 billion) will result in leverage in the mid-4x range (Debt/EBITDA, Moody's adjusted) and strong free cash flows. Moody's expects the upward ratings impact on the CFR to be limited to one notch. The secured debt component of the proposed capital structure represents approximately three-fourths of the total debt capital, which is likely to result in only one notch of ratings differential versus the CFR.

Vollständigen Artikel bei Moodys lesen