Moody's affirms Atlantic Broadband

Moody's Investors Service said it affirmed Atlantic Broadband Finance, LLC's corporate family and probability-of-default ratings at B2, senior secured debt at B1 (LGD3, 38%) and senior subordinated notes at Caa1 (LGD5, 89%).

The outlook is stable.

The affirmation followed the proposed increase to the company's senior secured debt facility. The company plans to redeem a portion of its $77 million of existing preferred equity, refinance its $25.5 million term loan A and issue a $110 million add-on to its existing term loan B. The transaction will also increase the company's flexibility under its debt covenants.

The affirmation reflects Moody's view that the company ratings can sustain the increase in leverage following the financing.

The agency said Atlantic Broadband's ratings reflect the company's high financial risk, 7x pro forma debt-to-EBITDA ratio, low interest coverage, lack of free cash flow and small scale.

The company's improved operating performance, upgraded cable systems and expectations for solid EBITDA growth leading to deleveraging over the next 18 months support the ratings, Moody's said.

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