Fitch Comments on Time Warner Bond Consent Solicitation.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Time Warner Cable This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. Inc. (TWC TWC The Weather Channel TWC Time-Warner Cable TWC Texas Workforce Commission (also seen as TWFC) TWC The Wellness Community TWC The Washington Center TWC Teachers & Writers Collaborative TWC Trustworthy Computing ), 'BBB' (Stable Outlook), as subsidiary of Time Warner Inc. 'BBB' (Stable Outlook), announced today that its subsidiary, Time Warner Entertainment, L.P. (TWE TWE Test of Written English TWE ThinkWave Educator (teacher productivity application) TWE That Was Easy TWE tap water enema TWE Threat Warning Equipment TWE Transitional Work Experience TWE Triangle Wind Ensemble ) has commenced a consent solicitation to amend the indentures governing the debt securities at TWE in an effort to amend reporting obligations under the indentures and simplify the guarantee structure. Fitch's ratings on TWC and Time Warner Inc. are unaffected by this announcement. Specifically, the proposed amendments would simplify the guarantee structure for the cable entities by providing a direct guaranty of the TWE debt securities by TWC and terminating the existing TW Partners Guarantees currently provided by American Television and Communications Corp(ATC ATC Air Traffic Control ATC Average Total Cost ATC Certified Athletic Trainer ATC At the Center (Hartford, Maine retreat center) ATC Applied Technology Council ATC All Things Considered ) and Warner Communications Inc.(WCI WCI Western Climate Initiative WCI Wright Center of Innovation WCI Whale Conservation Institute WCI Waterloo Collegiate Institute WCI Warren Correctional Institution (Warren, OH) WCI Warrior Concepts International ). While Fitch recognizes that the ATC/WCI guarantee structurally tied the content portion of the business to the distribution side (WCI includes certain filmed entertainment and network assets) Fitch has also historically assigned limited benefit to the guarantee by WCI/ATC of TWE's public debt and the TWC bank facilities' ratings, due to the lack of asset transfer restrictions at WCI and ATC. Removal of the WCI/ATC guarantees has reporting benefits to Time Warner and TWC in the event TWC issued registered debt securities requiring quarterly and annual reporting with the SEC, resulting in incremental legal and audit costs. Time Warner is further soliciting consents to amend the reporting requirements under the TWE indenture to allow TWE to provide Holders of TWE Bonds with TWC quarterly and annual reports. Under the post-consent structure, the company only has to file one set of consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for TWC since all involved entities and subsidiaries will be wholly-owned under SEC requirements. As such, the company will not file separate financials for TWE. However, when TWC does issue registered debt securities there will be consolidating financial statements filed that will show financials of the guarantors. Of note, the company issued a 10 supplement to the TWE Indenture on October 18, 2006, that essentially eliminated any liability for TWE bonds by TW NY Cable LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and issued a guarantee of TWE bonds by TW NY Cable Holding Inc., the 100% parent of TW NY Cable LLC. The purpose of this was also for simplification of financial reporting requirements. Overall, Fitch's ratings on Time Warner continue to reflect the company's strong and consistent free cash flow, solid credit protection measures, significant subscription based-revenue (at TWC), leading market positions in core businesses, strong brands, and content and distribution network, in addition to sound liquidity. Rating concerns include the company's exposure to cyclical advertising, which is less significant relative to industry peers, as advertising represents approximately 17% of total revenues in 2005 while peers are at an average of 40%-50%, and the inherent volatility of the filmed entertainment and television production businesses. While Fitch recognizes the recent increase in share price, the potential for additional shareholder friendly initiatives remains a concern. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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