Moody's rates Cablecom Luxembourg note B3

Moody's Investors Service said it assigned a provisional B3 rating to the proposed €290 million senior notes due 2014 to be issued by Cablecom Luxembourg SCA and affirmed the company's B1 corporate family rating and B1 CHF 1.33 billion senior secured bank facility.

The outlook is stable.

The proceeds from the notes will be used to repay the existing €290 million senior notes on the April 15 call date and will be placed in a defeasance account until that time. Since the notes are funded for their repayment, Moody's said that the risk of non-payment on the existing bonds is significantly reduced.

The proposed refinancing of the existing notes is one of the steps towards Cablecom's fold-in into the corporate structure of UPC Holding BV, the agency said. Cablecom is indirectly owned by Liberty Global Inc., a parent company of UPC. The notes will become obligations of UPC once Cablecom is absorbed into UPC's corporate and capital structure. In this case, the notes will be governed by the terms and conditions substantially similar to those of the existing notes at the UPC level.

On a combined pro forma basis, UPC is leveraged at 5.8x total debt to EBITDA, according to Moody's.

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