New York -- Moody's Investors Service, one of
the big debt rating agencies, said Wednesday that it raised Adelphia Communications
Corp.'s ratings based on an "improving credit profile."
The upgrade follows by a day Moody's decision to
improve its outlook on Lenfest Communications Inc.'s ratings to "positive"
from "stable." Also, on Tuesday, Standard & Poor's revised its outlook
on debt ratings for Comcast Corp. and various Comcast subsidiaries to "positive"
In Adelphia's case, existing ratings of seven rated
senior debt issues were bumped to B2 from B3, and its preferred stock rating rose to (b3)
from (caa.). (Moody's uses different symbols for debt and preferred stock ratings.)
Moody's also assigned a B2 rating to Adelphia's first-quarter $150 million issue
of 8.375-percent senior notes due 2008. The Adelphia ratings outlook is stable.
Moody's said the Adelphia revisions were
"prospective in nature," and assume continued improvements in its balance sheet
and operating performance. The upgrade also reflects "evidence of considerable
leverage reductions" in the cable business and the increased financial independence
of Hyperion Telecommunications, Adelphia's telephone subsidiary that successfully
completed an initial public offering in May.
Adelphia is still more highly leveraged than most MSOs,
though, and has "moderate" cash-flow coverage of interest and preferred
dividends, Moody's noted.
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