S&P rates UPC loans B

Standard & Poor's said it assigned its B bank loan rating and a recovery rating of 3 to UPC Distribution Holding BV's €3.45 billion senior secured bank loan facilities.

This bank loan, together with cash from parent United GlobalCom Inc., will be used to purchase the majority share of French cable operator Noos for a maximum of €660 million, repay about €100 million in outstanding public debt at UPC Polska LLC, and repay about €1.1 billion of bank debt under the previous bank facility term loan tranche B.

S&P affirmed UPC's corporate credit rating, UGC Europe Inc.'s corporate credit rating and United GlobalCom's corporate credit rating at B and United GlobalCom's €500 million senior unsecured convertible notes at CCC+.

The outlook is stable.

S&P said the rating reflects United GlobalCom's significant business risk in its 11 European cable markets, which comprise the vast majority of its revenues and EBITDA.

The tightest covenant, senior debt to EBITDA, currently requires a maximum 5.9x six-month annualized debt-to-EBITDA ratio, declining to 4.9x in the fourth quarter of 2004, and reaching 4.1x by the end of 2005.

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