Moody's rates Charter Communications loans B1, B3

Moody's Investors Service said it assigned a B1 rating with a loss-given-default assessment of LGD2 (14%) to Charter Communications Operating, LLC's proposed $1 billion first-lien loan and a B3 (LGD3, 41%) rating to its $550 million second-lien loan.

The agency also affirmed Charter Communications Inc.'s corporate family and probability-of-default ratings at Caa1, speculative grade liquidity rating at SGL-3 and convertible senior notes at Caa3 (LGD6, 96%); Charter Communications Operating's senior secured revolver and senior secured first-lien term loan at B1 (LGD2, 14%) and senior second-lien notes at B3 (LGD3, 41%); CCO Holdings, LLC's senior notes at Caa1 (LGD4, 53%) and senior floating-rate notes at Caa1 (LGD3, 48%); the senior secured notes of CCH I, LLC and CCH II LLC at Caa2 (LGD5, 72%); CCH I Holdings, LLC's senior notes and senior discount notes at Caa3 (LGD6, 91%); and Charter Communications Holdings, LLC's senior notes, senior discount notes, 8¼% senior notes due 2007 and 8 5/8% senior notes due 2009 at Caa3 (LGD6, 95%).

The outlook is stable.

The affirmation followed the proposed refinancing of the senior secured credit facilities of Charter Communications Operating. The proposed facilities include a $1.5 billion revolving facility, a $1 billion initial term loan, a $5 billion refinancing term loan and a $550 million second lien loan.

The agency said the proposed transaction will improve intermediate-term liquidity and extend the company's maturity profile at a modestly lower interest rate. The proposed transaction also provides evidence of the company's continued debt market access.

However, the Caa1 corporate family rating continues to assume that Charter's capital structure will remain unsustainable over the long term despite the refinancing and despite recent operational progress, Moody's said.

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