S&P affirms Cogeco

S&P said it affirmed the BB- corporate credit rating and all other ratings on Cogeco Communications (USA) Inc.

The outlook is stable.

The agency said the action reflects an expectation that debt to EBITDA will decline to the mid- to high-5x area by fiscal year-end 2019 from about 6.5x pro forma due to EBITDA growth and modest debt reduction following the close of the acquisition of the Metrocast assets in January.

“We believe that the probability of leverage rising above 7x is low given the fairly predictable and stable free cash flow generation driven by revenue visibility from cable's subscription-based business model and the company's leverage target of 5.5x, or 6.5x including the debt-like treatment of the preferred equity,” S&P said in a news release.

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