Moody's rates Rainbow Media facility Ba2

Moody's Investors Service said it assigned a Ba2 rating to Rainbow Media Holdings LLC's new $575 million senior secured term loan C and withdrew its former Ba2 rating for the company's $140 million term loan B and the Ba1 ratings for the revolver and term loan of the company's indirect subsidiaries.

The company's Ba2 senior implied rating, B1 senior unsecured issuer rating and Ba2 rating for the senior secured revolver were all confirmed.

The outlook is negative.

Moody's said the Ba2 rating for the new term loan reflects the increased financial leverage resulting from the new transaction, even after considering the pro forma affect of the inclusion of operating results from the 20% minority stake of AMC/IFC/WE that was previously held by MGM; growing business risk associated with the company's affiliate carriage contract renegotiations; and continued overhang from the SEC investigation into the accounting mis-statements by certain Rainbow Media Holdings business units.

The ratings for the Rainbow Media Holdings bank credit facilities are supported, however, by the company's still strong perceived loan-to-value ratios, based largely on the relatively high cash flow multiples that have been paid for cable networks over the past 18 months, as well as the strong free cash flow generated by the AMC/IFC/WE subsidiaries.

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