S&P rates Tele Columbus loan B

S&P said it assigned a B rating with a 4 recovery rating to the proposed €125 million second incremental first-lien facility to be borrowed by Tele Columbus AG.

The company intends to repay its second-lien facility with the proceeds of the proposed loan, the agency said.

The 4 recovery rating indicates the higher half of the 30% to 50% expected default recovery range, reflecting a valuation of the company as a going concern, S&P said.

The agency said the recovery prospects are constrained by the large amount of first-lien debt.

The B rating on the existing first-lien debt is unchanged, S&P added, but the recovery rating was lowered to 4 from 3 because of a dilution of recovery prospects for first-lien lenders due to the additional proposed first-lien debt.

S&P also said it affirmed the CCC+ rating on the company's second-lien facility with a recovery rating of 6, indicating 0 to 10% expected default recovery.

The ratings consider an expectation of increased competition in broadband, telephone and cable TV, the agency said.

S&P said it values Tele Columbus as a going concern because it is a key player in the sector with high barriers to entry in the market, recognized brand name, long-term contracts and experienced management.

The proposed refinancing has no impact on the company’s B corporate credit rating, the agency said.

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