Moody's rates WideOpenWest facility B2

Moody's Investors Service said it assigned a B2 rating to the proposed $230 million senior secured bank credit facility of WideOpenWest Finance LLC and assigned a B2 senior implied rating to the company.

Rated B2 are the company's $30 million senior secured revolver due 2010, $50 million senior secured term loan A due 2010, $150 million senior secured term loan B due 2011, and senior implied rating. The company's senior unsecured issuer rating is Caa2.

The outlook is stable.

Moody's said the ratings principally reflect Moody's considerable concerns about the company's overbuild strategy, which entails significant additional competitive pressure from large and well-capitalized incumbent cable TV service providers in three of its four principal markets.

The ratings subsequently also reflect some uncertainty about the asset value underlying the company's debt, particularly in a downside scenario. Because WideOpenWest is an overbuilder, Moody's said it believes that the company's assets would not necessarily generate much interest among traditional cable service providers who have historically been fairly reluctant to engage in head-to-head competition with a wireline incumbent cable company.

Notably, however, the ratings draw support from the company's comparatively more modest financial leverage, better coverage levels, and projected positive free cash flow given the advanced technological state of its systems.

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