Moody’s reviews Columbus

Moody's Investors Service said it placed Columbus International Inc.'s B2 corporate family rating and the B2 debt ratings of its $1.25 billion senior unsecured notes maturing in 2021 on review for upgrade.

The action follows Columbus’ Nov. 6 announcement that it entered into a definitive agreement to be acquired by Cable & Wireless Communications plc (CWC, Ba2 negative) in a transaction totaling $3 billion.

"The review was triggered by Cable and Wireless' plans to acquire Columbus, and our view that it would lead to an enhancement of Columbus credit profile, given CWC's larger scale and leading market positions throughout the Caribbean and Panama, as well as its stronger balance sheet and credit metrics," Moody’s lead analyst Sandra Beltrán said in a news release.

"In our view the plan, if executed successfully, is credit positive for Columbus. Whereas Columbus' leverage calculated as debt/EBITDA reached 5.3x in the last 12 months (LTM) ended in June 2014, CWC's adjusted debt/EBITDA was 2.5x in the LTM ended in March of 2014, leading to expectations of a 3.5x leverage level for the consolidated entity by the end of 2015."

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