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Moody’s Raises Mediacom’s Debt Rating

Credit rating agency Moody’s Investors Service said it upgraded Mediacom Communications’ corporate debt rating to Ba1 (one notch below investment grade) with a stable outlook, based on the mid-sized cable operator’s continued ability to pare down its debt.

Moody’s said that Mediacom has steadily reduced its debt over the years -- its 2018 leverage ratio was 3.2 times cash flow, compared to 6.8 times in 2001 -- and that is expected to continue. Moody’s estimated Mediacom would further reduce leverage to 2.5 times by the end of 2019.

Aside from a conservative financial policy -- it has not made a debt-financed acquisition in eight years, pays down debt with its own free cash flow generation and does not pay dividends -- Moody’s said Mediacom’s performance also supports the rating, with mid-single-digit percentage increases in revenue and cash flow. Business services revenue, Moody ‘s added, is growing at an 8% to 10% clip.

In the fourth quarter revenue rose 5.2% to $496.4 million, while adjusted operating income before interest and depreciation (AOIBDA), rose 6.6% to $196.2 million. For the full year, revenue was up 4.2% to $1.956 billion, and AOIBDA rose 4.6% to $745 million.