S&P rates Tele Columbus notes

Standard & Poor's said it assigned its B+ long-term corporate credit rating to the German network cable TV provider Tele Columbus AG & Co. KG. The outlook is stable.

At the same time, S&P assigned its B senior unsecured debt rating to Tele Columbus' proposed €195 million floating-rate notes due 2010 and its B- senior subordinated debt rating to the company's proposed €280 million notes due 2011.

"The ratings principally reflect Tele Columbus' high leverage and increasing competitive challenges, which are mitigated by a mature but predictable contract-driven reselling business model and an adaptable capital structure," said S&P credit analyst Simon Redmond.

Pro forma for the refinancing, Tele Columbus' lease-adjusted total debt to pre-exceptional EBITDA would have been about 5.6x at Dec. 31, 2003. This credit metric is likely to remain at high levels in the next few years given the company's modest free cash flow generation, the agency said.

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