S&P Upgrades Cablevision Systems;Rts $300M Sr Nts BB+.NEW YORK--(BUSINESS WIRE)-- Standard & Poor's CreditWire 8/15/97 -- Standard & Poor's today raised its corporate credit rating on Cablevision System Corp. to double-`B'-plus from double-`B'-minus and its subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. ratings to double-`B'-minus from single-`B'. Ratings reflect Cablevision's greatly improved business position, good technical quality of its systems, and substantial reduction in debt relative to prospective cash flow. Cablevision's already strong 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 metropolitan group of cable systems will be vastly expanded with the pending contribution of neighboring cable units from Tele-Communications Inc. (TCI (Trustworthy Computing Initiative) An umbrella term from Microsoft for its efforts to improve security in Windows. TCI was announced in 2002 after viruses such as Code Red and Nimda had succeeded in attacking numerous Windows computers. ). The company will have a large 2.5 million customer base in suburban New York markets covering all of Long Island, and a sizable ring of communities extending around New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. from Monmouth County, N.J. to Fairfield, Conn. Acquired through issuance of stock to TCI and assumption of a small amount of debt, the transaction will significantly reduce Cablevision's debt leverage. TCI will own about one-third of Cablevision stock and the purchase, expected to be completed in early 1998, will help to lower Cablevision's debt to cash flow to the more moderate 5.0-5.5 times (x) range from about 6.3x at June 30, 1997. A planned transaction with Fox/Liberty Networks LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and proceeds of asset sales will lower leverage further. The company will have a total 2.5 million subscribers in the nation's largest media market, compared to its total subscriber base of 2.6 million at June 30, 1997. Cablevision's systems are technically advanced and well on the way to be able to provide advanced communications services including, cable modeming, local telephone services, video on demand, and more than 100 cable channels. This puts the company at the forefront of its peer companies in delivering new services and makes it a formidable competitor in its markets. Cablevision already is making available residential telephone service to 4,400 households on Long Island, N.Y. using its fiber optic and coaxial cable plant. These new services should help the firm raise average revenue per subscriber from about $39 per month in the second quarter of 1997, about the national average, to a much higher level over the medium term. OUTLOOK: STABLE Tempering upgrade potential is management's history of heavily debt-financed acquisitions. While good business combinations, these transactions, including the recent purchase of Madison Square Garden Current arenas in the National Hockey League Western Conference Eastern Conference and related sports franchises, markedly increased financial risk. The large reduction in debt to cash flow resulting from the TCI stock purchase and other asset sales and programming mergers, represents a dramatic change in financial policy. Management also has stated that it has a goal of reducing leverage. The rating anticipates that management will adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. this more conservative policy, Standard & Poor's said. -- CreditWire CONTACT: Robert C Nelson, New York Nelson is a town in Madison County, New York, United States. The population was 1,964 at the 2000 census. The town was named after Horatio Nelson, the English naval hero. The Town of Nelson is an interior town, located in the southwest part of the county. (1) 212-208-1612 Copyright 1997, Standard & Poor's Rating Services |
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