S&P rates Altice US notes BB-

Standard & Poor's said it assigned its BB- issue-level rating and 1 recovery to Altice US Finance I Corp.'s proposed $1.5 billion secured notes due 2026.

The notes will be guaranteed by U.S. cable operator Cequel Communications Holdings II and Cequel Communications LLC.

The 1 recovery rating on the notes reflects an expectation for very high (90%-100%) recovery in a simulated default scenario.

The company will use the proceeds to repay its existing $1.5 billion term loan B.

The proposed transaction will not significantly alter the company's credit metrics or recovery prospects; therefore, the B corporate credit rating and stable outlook, as well as all issue-level ratings, on Cequel Communications Holdings I LLC remain unchanged.

S&P said the ratings reflect the company's high leverage in the mid-7 times area and the expectation that leverage will remain elevated over the next 12 months. The agency believes the company has the ability to reduce leverage fairly quickly, by over 0.5 times annually through organic growth and potential cost synergies, although material leverage reduction will depend on Altice's financial policy over the next few years.

Cequel's position as an incumbent cable operator with good revenue visibility provided by subscription based services, its lack of material broadband competition in its markets, and the potential for modest margin improvement partially offset these factors, S&P said.

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