Moody's rates Cox notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to Cox Communication, Inc.'s proposed $1.5 billion senior unsecured notes, consisting of 10-year and 30-year tranches.

It is anticipated that the new notes will be pari passu with the company's existing senior unsecured indebtedness.

The proceeds will be used together with cash on hand to fund a $1.5 billion dividend to its parent, Cox Enterprises, Inc., and to repay Cox's 4.625% notes due June 2013, Moody's said.

The transaction will increase leverage to 2.9x from 2.5x as of Dec. 31, 2012, the agency said.

However, the company expects to sustain leverage at less than 3x and continue generating steady free cash flow of more than $1 billion annually, so its long-term debt ratings are not impacted, Moody's said.

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