Moody's may raise Rainbow National

Moody's Investors Service said the ratings of Rainbow National Services LLC remain on review for possible upgrade following Cablevision Systems Corp.'s announcement that Rainbow Media Holdings will be spun off.

Moody's said it believes Rainbow would benefit from the simplified capital structure, lower event risk, and the likelihood of no incremental debt at Rainbow Media or Rainbow. On that premise, the debt at Rainbow would be supported by attractive assets, primarily the national cable networks, AMC, IFC and WE with good cash flow generation; it will also no longer be as burdened by the cash demands at VOOM, a sister subsidiary now in the process of shutting down.

Ratings under review for possible upgrade include the $350 million senior secured revolving credit facility at B1, the $600 million senior secured term loan B at B1, the $300 million of senior unsecured notes due 2012 at B3, the $500 million of senior subordinated notes due 2014 at Caa1, the corporate rating of B2, and the senior unsecured issuer rating of B3.

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