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Fitch Ratings assigns 'BBB-'/'RR1' rating to QVC, Inc.'s notes.

New York: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, assigned a 'BBB-'/'RR1' rating to QVC, Inc.'s (QVC) proposed issuance of senior secured notes. QVC is expected to use net proceeds for general corporate purposes including the repayment of existing indebtedness.

QVC is a wholly owned subsidiary of Liberty Interactive LLC (Liberty). Liberty and QVC's Long-Term Issuer Default Ratings (IDRs) are currently 'BB'/Stable Outlook. QVC successfully reduced total leverage to its 2.5x leverage target (excluding unallocated corporate overhead) within Fitch's expected time frame. Pro forma for the transactions discussed above, Fitch calculated QVC's gross leverage was 2.6x (2.5x excluding unallocated corporate overhead) and Liberty's gross leverage at 3.6x as of June 30, 2018.

The ratings for Liberty and QVC reflect the consolidated legal entity/obligor credit profile. Based on Fitch's interpretation of Liberty's indentures, Liberty could not spin out QVC without bondholder consent as a spinoff would trigger the "substantially all" asset disposition restriction in the indentures. Liberty is a wholly owned subsidiary of Qurate Retail, Inc. (Qurate), formerly known as Liberty Interactive Corporation (LIC). As of June 30, 2018, Liberty had approximately $7.9 billion of debt outstanding, including approximately $5.1 billion at QVC.

It rates both QVC's senior secured bank credit facility and senior secured notes 'BBB-', two notches above Liberty's IDR. The secured issue rating reflects what Fitch believes QVC's stand-alone ratings would be. Qurate acquired zulily Inc. in March 2015 and the 61.8% it did not already own of HSN, Inc. (HSN) in December 2017, creating the world's largest video-centric retailer and a leading multimedia retailer. Qurate expects to realize more than $200 million of cost synergies over four years from HSN's integration. In March 2018, LIC acquired General Communication, Inc. (GCI) and completed a tax-free spin of GCI Liberty, Inc. (GCI Liberty), an entity created following the contribution to GCI of certain assets and liabilities of Liberty Ventures Group (Ventures), a wholly owned subsidiary of Liberty. Prior to its contribution to GCI, Ventures reattributed certain assets and liabilities to Liberty.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Dec 14, 2018
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