Moody’s rates Cable Communications notes B1

Moody's Investors Service said it assigned a B1 rating to the proposed €375 million equivalent of senior secured notes (due 2021/2023) being issued in a combination of euro and Romanian Leu by Cable Communications Systems NV, the controlling shareholder of RCS & RDS SA.

At the same time, the agency affirmed the B1 corporate family rating and B1-PD probability of default rating of Cable Communications.

The outlook on all ratings was changed to positive from stable.

Moody's said the outlook change reflects its expectation that the company will continue to maintain a Moody's adjusted Gross Debt/ EBITDA of below 3.5 times and will turn free cash flow generative from 2017 onward.

With the proposed refinancing, Cable Communications aims to reduce its interest costs, improve its debt maturity profile and partially decrease its exposure to foreign exchange fluctuations, the agency added.

"We expect the EBITDA margin of RCS & RDS to stabilize at around 32%. Moderate revenue growth coupled with a stable EBITDA margin and lower capex requirements should result in positive free cash flow generation from 2017 onwards enabling the company to achieve further de-leveraging, absent any material debt-financed acquisitions," Gunjan Dixit, Moody's vice president, senior analyst and lead analyst for Cable Communications, said in a news release.

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