Moody's rates UPC notes B3

Moody's Investors Service said it assigned a rating of provisional B3 to the proposed €300 million of senior notes issuance by UPC Holding BV, an indirect subsidiary of UnitedGlobalCom, Inc., and affirmed the ratings of UGC and its subsidiaries.

Moody's said it is its understanding that the proceeds of the notes will be upstreamed out of the UPC Holding group and used to fund a portion of the purchase price of Cablecom Holding AG, although, in the event that the acquisition is not consummated, the proceeds can be used for distributions to UPC's direct and indirect parent companies or for general corporate purposes.

Risks continue to include potential integration risks with regards to this and future acquisitions, strong competition from larger and more established telecommunications competitors and the challenge of managing a broad base of multi-national operations in a complex capital structure, the agency said.

However, Moody's noted the ratings are supported by UGC's healthy growth trends and satisfactory EBITDA margins, the size and scope of the company's operations and the upgraded nature of a portion of the company's networks.

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