Both Moody’s Investors Service and Fitch Ratings have taken note of the proposal by CEO Rocco Commisso to buy out other shareholders of Mediacom Communications and take the cable MSO private. The ratings agencies say the move could hurt the company’s credit ratings.
Moody’s issued a very brief statement saying Mediacom’s “ratings could come under pressure if the proposed transaction to go private as announced today comes to fruition.”
Similarly, Fitch said it had placed Mediacom’s debt ratings on its “Rating Watch” with negative indications. Fitch said the proposed transaction would stress Mediacom’s ability to generate free cash flow.
Moody’s noted that Mediacom serves approximately 1.2 million basic video subscribers in a wide variety of small- to mid-sized markets. It generated $1.47 billion in revenue over the 12-month period ended March 31st.