Fitch places Mediacom Communications ratings on watch list after proposed plan to go private
By APTuesday, June 1, 2010
Fitch places Mediacom ratings on watch list
SEATTLE — Two ratings services weighed in on Mediacom Communications Corp.’s proposed plan to go private, saying the move could hurt the television cable company’s credit ratings.
Mediacom said Tuesday that its founder and CEO, Rocco Commisso, offered to acquire all the company’s shares he doesn’t already own for about $245 million.
Fitch Ratings placed Mediacom’s “B+” issuer default rating and certain other ratings for the company’s senior secured and unsecured debt on Rating Watch Negative.
Fitch said it thinks the proposed transaction will stress Mediacom’s ability to generate free cash flow. If the transaction is financed with debt, the company’s leverage would be too high for Fitch to maintain the current ratings.
Moody’s also said that its ratings for Mediacom could come under pressure if the company decides to go private. Moody’s has a Ba3 rating for new bank credit facilities for Mediacom’s subsidiaries.
Both the Fitch and Moody’s ratings on Mediacom fall into the junk category.
