S&P assigns Tele Columbus loans B+, B-

Standard & Poor's said it affirmed its B+ long-term corporate credit rating on Tele Columbus AG.

The outlook is negative.

The agency also assigned its B+ issue rating and 3 recovery rating to the company's new €435 million senior secured facility and affirmed its B+ issue rating on the existing €500 million senior facilities. The recovery rating on all the senior secured facilities is 3, indicating an expectation of meaningful recovery in the event of a payment default, in the lower half of the 50%-70% range.

At the same time, the agency assigned its B- issue rating to the second-lien facility, with a recovery rating of 6, indicating an expectation of negligible (0-10%) recovery in the event of a payment default.

Tele Columbus is using the new senior and junior debt, balance-sheet cash and an equity bridge facility of €125 million to fund the purchase. It plans to use a rights issue later this year to refinance the equity bridge facility and repay a portion of the additional debt.

Tele Columbus estimates that the transaction will increase its leverage, as per the company's definition and on a combined basis with PrimaCom, to about 5 times from 2.9 times as of March 31. The company has indicated it then aims to return leverage to its publicly stated medium-term range of 3 times to 4 times within the next 18 to 24 months.

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