Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
Accept our to continue to Moodys.com:
PLEASE READ AND SCROLL DOWN!
By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s information that becomes accessible to you [after clicking “I AGREE”] (the “Information”). References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.
Terms of One-Time Website Use
1. Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.
2. You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities. Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision. No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.
3. To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.
4. You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.
5. You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.
I AGREE
23 Mar 2011
London, 23 March 2011 -- Moody's Investors Service has today assigned a B2 corporate family rating
(CFR) and probability-of-default rating (PDR) to Musketeer
GmbH ('Musketeer'), the parent of Kabel BW Erste Beteiligungs
GmbH ('KBW' or 'the company'). At the same
time, Moody's has assigned provisional ratings to the following
debt instruments of the different group entities:
- EUR 1.57 billion (in a combination of euro and U.S.
dollars) worth of senior secured notes due 2019 and senior secured floating
rate notes due 2018 to be issued by Kabel BW Erste Beteiligungs GbmH and
Kabel Baden-Wuttemberg GmbH & Co. KG: (P)B1
- EUR 680 million of senior notes due 2021 to be issued by Musketeer
GmbH: (P)Caa1
The outlook for all the ratings is stable. This is the first time
that Moody's has assigned ratings to Musketeer. Moody's notes
that following completion of the planned post debt-issuance re-organization
process, Kabel BW Holdings will assume all the debt obligations
of Kabel BW Erste Beteiligungs GbmH and Kabel Baden-Wuttemberg
GmbH & Co. KG to become the sole issuer of the senior secured
notes as well as the RCF.
RATINGS RATIONALE
"The B2 CFR reflects the weak post deal credit metrics for Musketeer,
mitigated by the strength of KBW's business risk profile," says
Gunjan Dixit, Moody's lead analyst for Musketeer.
The acquisition of KBW by Liberty Global ('LGI') was announced
on 21 March 2010 and values the company at EUR3.16 billion,
excluding transaction costs (8.1x 2011 EBITDA including synergies
-- as estimated by LGI). The deal is subject to regulatory
approval and is expected to close in the second half of 2011.
EQT Funds IV and V ('EQT'), the current owners of KBW
will be re-capitalizing the company with EUR 2.25 billion
of new debt. This will fund financing fees of EUR 60 million,
refinance KBW's existing debt (EUR 1.18 billion) and repay
most of a shareholder loan from EQT (EUR 1.0 billion). Post
this repayment, a residual amount of EUR 100 million will remain
outstanding under this loan, which Moody's has treated as
debt within its credit metrics for Musketeer. Musketeer's
capital structure is complemented by common equity. Moody's
notes that Musketeer will have cash and cash equivalents of EUR 105 million
post closing of the transaction.
The new capital structure is expected to be assumed by LGI upon completion
of the transaction. Once the regulatory approval is obtained,
LGI will pay EUR 910 million as final acquisition consideration to EQT
and thereafter gain complete control of KBW. Once the transaction
is consummated by LGI, UPC Germany HoldCo 1 GmbH (a subsidiary of
LGI), would assume the obligations of Musketeer GmbH as the issuer
of senior notes and would become the ultimate holding company for KBW.
At that stage, Moody's would expect to move its CFR to UPC
Germany HoldCo 1.
Should the LGI acquisition not be consummated, Aldermanbury Investments
Limited, a subsidiary of JP Morgan Chase & Co. (the 'Backstop
Purchaser') has agreed to assume rights and obligations of the purchaser
(LGI) under the sale and purchase agreement subject to the terms defined
in the indenture. In such a situation, the Backstop purchaser
expects to sell or otherwise transfer Musketeer ('Backstop Transfer')
to any other purchaser subject to certain conditions. In addition,
if the Acquisition Agreement is terminated after the receipt of the Regulatory
Failure Notice prior to the consummation of the Backstop Acquisition,
EQT will be permitted to, subject to certain conditions, sell
or transfer (the ''EQT Transfer'') Musketeer to
any other purchaser. Moody's notes that no change of control
would be triggered under the indenture for the newly issued bonds upon
the consummation of the acquisition by LGI, or the Backstop Acquisition,
the Backstop Transfer or the EQT Transfer, provided that in connection
with the Backstop Transfer and the EQT Transfer, if the consolidated
net leverage (as defined in the indenture) of the Senior Notes Issuer
and its restricted subsidiaries is 6.25 to 1.00 or less
at the time of such transaction giving pro forma effect thereto.
Moody's ratings reflect (i) the modest scale of KBW's revenues
relative to rated peers; (ii) high pro-forma leverage of the
company based on 2010 year-end EBITDA; and (iii) de-leveraging
in the near term remaining largely a function of EBITDA growth,
in the absence of amortizing debt. Positively, the ratings
take into account (i) KBW's good market position as a provider of
cable television, broadband and telephony services in the Baden-Württemberg
region; (ii) the company's continued robust operating performance;
(iii) the competitive advantage offered by its advanced network offering
good potential for further growth; (iv) its solid EBITDA margins
translating into positive free cash flow generation.
The Baden-Württemberg ("BW") region offers a good
and growing market to KBW with approximately 5 million households.
The company already has a sizeable network in the region which has been
fully upgraded to DOCSIS 3.0 standard. In this regard,
Moody's notes that KBW is currently ahead of its German peers in
terms of network upgrade. In Moody's opinion, KBW remains
well positioned to benefit from increased demand over the short to medium
term for its "bundled" products, with the introduction of "next-generation"
digital TV and faster-speed broadband services being facilitated
by DOCSIS 3.0 technology.
Over the past five years, KBW's reported revenues have grown
at a CAGR of approximately 18%. During 2010, revenues
of the company increased by 14% driven by the largely resilient
and recurring nature of its revenues from its Basic Cable Services (BCS)
segment (including carriage fees) which accounts for approximately 53%
of total revenues as well as the good growth in the revenues from Internet
& Telephony services (37% of total revenues). KBW increased
its EBITDA margin to 56% in 2010 after 52.7% in 2009.
Given that Moody's expects KBW's EBITDA to grow consistently in 2011 and
beyond, Moody's ratings currently are based on the expectation
that Musketeer's leverage will improve to approximately 6.3x
Gross Debt/EBITDA (as adjusted by Moody's) by the end of 2011.
While Moody's believes that Internet & Telephony followed by
BCS revenues should continue to be the key growth driver for the company
over the medium term, building presence in the Pay TV, Mobile
and B2B services overtime, may still prove relatively challenging
to KBW given (i) the wealth of quality content already available on Free
to Air (FTA) broadcasting in Germany thereby to some extent undermining
the take-up of Pay TV in the country; (ii) competitive pressures
in the mobile services segment; and (iii) the lack of track record
of KBW in providing B2B services.
Reduction in leverage on a Gross Debt to EBITDA (as adjusted by Moody's)
of well below 6.0x; track-record of positive free cash
flow generation and conservative financial strategy could lead to upward
rating pressure. On the contrary, downward rating pressure
could develop with an increase in leverage above 7.0x Gross Debt
to EBITDA (as adjusted by Moody's) and/or material negative free
cash flow on a sustained basis.
The (P)B1 rating of the senior secured bonds is one notch higher than
the CFR cushioned by the presence of senior unsecured notes in the capital
structure. The Super-Senior RCF ranks ahead of the Senior
Secured Notes in the debt waterfall reflecting its priority of payment
from enforcement proceeds. The (P)Caa1 rating of the senior unsecured
notes is a result of Musketeer's high leverage and their contractually
and structurally subordinated position relative to the company's RCF and
senior secured bonds. Moody's notes that the debt incurrence
test for the senior notes has been set at 5.0x consolidated leverage
ratio and 4.0x senior secured leverage ratio. The RCF is
constricted by a leverage based maintenance covenant and we would expect
Musketeer to maintain adequate headroom under the covenant at all times.
Moody's issues provisional ratings in advance of the final sale of securities
and these ratings reflect the rating agency's preliminary credit opinion
regarding the transaction only. Upon a conclusive review of the
final documentation, Moody's will endeavour to assign a definitive
rating to the revolving credit facility and the notes. A definitive
rating may differ from a provisional rating.
The principal methodologies used in this rating were Global Cable Television
Industry published in July 2009, and Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009.
Musketeer GmbH, is the ultimate holding company for KBW, which
is the third largest cable operator in the Germany with revenues (including
other operating income) of EUR 563.4 million in 2010.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, confidential and proprietary Moody's Investors
Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of assigning
a credit rating.
The rating has been disclosed to the rated entity or its designated agents
and issued with no amendment resulting from that disclosure.
Moody's Investors Service may have provided Ancillary or Other Permissible
Service(s) to the rated entity or its related third parties within the
three years preceding the Credit Rating Action. Please see the
ratings disclosure page www.moodys.com/disclosures on our
website for further information.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
London
Gunjan Dixit
Analyst
Corporate Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
London
Chetan Modi
Senior Vice President
Corporate Finance Group
Moody's Investors Service Ltd.
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's Investors Service Ltd.
One Canada Square
Canary Wharf
London E14 5FA
United Kingdom
JOURNALISTS: 44 20 7772 5456
SUBSCRIBERS: 44 20 7772 5454
Moody's assigns first time ratings (CFR at B2) to Musketeer GmbH (KBW); rating outlook is stable
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.
CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.
MOODY'S CREDIT RATINGS , ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.
ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.
MOODY'S CREDIT RATINGS , ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.
All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.
To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.
NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.
Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."
Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.
Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.
MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
|
|
