The bid by Mediacom founder and CEO Rocco Commisso had landed the company’s debt ratings on the “Rating Watch negative” list at Fitch ratings. But now that Commisso has given up, the company’s debt is back in Fitch’s good graces.
“Fitch Ratings has affirmed the ‘B+’ Issuer Default Rating (IDR) assigned to Mediacom Communications Corporation (Mediacom) and its wholly owned subsidiaries Mediacom LLC (LLC) and Mediacom Broadband LLC (Broadband) at ‘B+’, and has removed the ratings from Rating Watch Negative. In addition, specific issue ratings assigned to the company’s senior secured and senior unsecured debt, as listed at the end of this release, have also been affirmed and removed from Rating Watch Negative. Approximately $3.4 billion of debt outstanding as of June 30, 2010 is affected by Fitch’s actions. The Rating Outlook is Stable,” the ratings agency announced.
“Fitch’s rating action follows the announcement by Rocco B. Commisso, Mediacom’s chairman and chief executive offer, that he has withdrawn his offer to purchase all of Mediacom’s outstanding class A and class B common stock not already beneficially owned by Commisso for $6.00 per share in cash. From Fitch’s perspective the transaction, if accepted by the special committee of Mediacom’s board of directors and approved by a majority of shareholders of Mediacom’s common stock not owned by Commisso, has the potential to weaken Mediacom’s credit profile by increasing leverage to a level outside of Fitch’s expectations for the ‘B+’ rating category and hindering the company’s ability to generate expected levels of free cash flow,” fitch explained.
Mediacom has approximately $3.4 billion in total debt, Fitch said.