Moody's ups Rogers Communications

Moody's Investors Service said it upgraded the corporate family rating of the Rogers Communications Inc. (RCI) group of companies as well as the senior secured ratings of Rogers Cable Inc. and Rogers Wireless Inc. to Ba2 from Ba3, while the senior subordinated rating of Wireless was upgraded from B2 to Ba3.

This action reflects Moody's expectation that RCI, after generating only nominal cash flow in recent years through 2005, will likely produce meaningful cash flow by 2007 and that management will likely use it to reduce debt, although execution risks remain, the agency said.

RCI will depend on improving results at Rogers Wireless to offset a continuing material cash drain at Rogers Cable, the agency said, noting the ratings reflect Moody's belief that Rogers Cable is considered to be a strategic asset by the CEO and RCI will support sustained investment in the cable operation despite the lack of a guarantee.

The outlook is positive because Moody's said it believes that RCI is likely to produce increasing levels of cash flow.

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