S&P rates recovery of UPC notes 5

Standard & Poor's said it affirmed its B long-term debt rating with a recovery rating of 3 on the €4.17 billion-equivalent senior secured loan issued by UPC Broadband Holding BV (B/stable) and affirmed its CCC+ long-term debt rating on the €800 million of senior notes issued by related entity UPC Holding BV and assigned a recovery rating of 5 to the notes, indicating negligible (0%-25%) recovery of principal

The agency said the senior notes are rated CCC+, two notches below the B corporate credit rating on UPC, because noteholders are structurally subordinated to the senior debt with minimal security in the form of a share pledge of UPC Holding.

S&P said the corporate credit rating on UPC reflects the group's significant sustained leverage and weak cash flow; its propensity for acquisitions, including the debt-funded purchase of Cablecom Holdings AG (B/stable) and operational challenges.

The ratings are supported by the fact that the group has a diverse portfolio of cable operations, is reporting subscriber, revenue and EBITDA growth and is implementing a triple-play strategy, the agency said. UPC comprises the main operating assets of Liberty Global Inc. (B/stable).

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