Fitch assigns VMED O2 BB-

Fitch said it assigned a first-time long-term issuer default rating of BB- to VMED O2 UK Ltd., the proposed joint venture of Virgin Media Inc.’s U.K. cable operations and Telefonica SA’s U.K. mobile business.

Fitch also assigned expected instrument ratings of BB+/RR1 to the venture’s senior secured notes being raised by VMED O2 UK Financing I and the secured term loans being raised by VMED O2 Holdco 4 and Virgin Media Bristol.

“The ratings reflect the group’s enhanced business profile, with the merger making it the U.K.’s second-largest telecoms carrier after the incumbent BT Group plc (BBB/stable). The merger roughly doubles the group’s revenue scale and positions it with a strong convergent position at a time when the U.K. is at a more nascent stage in fixed-mobile development than some European markets,” Fitch said in a press release.

The outlook is stable.

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