December 10, 2012 / 3:13 PM / 5 years ago

TEXT-S&P rates AMC Network notes 'BB-'

Dec 10 - Standard & Poor's Ratings Services assigned its 'BB-' issue-level
and '4' recovery rating to New York City -based cable network operator AMC
Network Inc.'s proposed $600 million of senior unsecured notes due
2022. The '4' recovery rating indicates our expectation of average (30%-50%)
recovery for noteholders in the event of a hypothetical payment default.
Proceeds are to be used to refinance the company's term loan B ($578 million
outstanding). All other ratings, including the 'BB-' corporate credit rating,
are unaffected by this transaction. We will withdraw our ratings on the term
loan B when the transaction closes. As a result of the transaction, we expect
adjusted leverage to increase slightly to 4.9x from 4.8x and that interest
coverage will decline to about 4.4x from 4.7x.

Our rating on AMC reflects the company's "fair" business risk profile and 
"aggressive" financial risk profile, according to our criteria. Our business 
risk assessment is based on the company's limited cable network portfolio, as 
it depends disproportionately on a single network, the AMC Network, for the 
majority of its revenue and cash flow. Additional key considerations are its 
limited international success thus far, limited prospects for near-term 
improvement in these trends; and the trend of declining cable network audience 
ratings across the cable network sector (though AMC has gone against this 
trend in the last few years). We view AMC's management and governance as 
"fair."

The company's stable affiliate fees somewhat mitigate these risks. Our 
financial risk assessment reflects the company's meaningful lease-adjusted 
leverage, which was 4.9x, pro forma for the November 2012 $50 million 
prepayment of its term loan and this transaction. We expect leverage to 
improve to the low-4x area by the end of 2013. 

RELATED CRITERIA AND RESEARCH
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

RATINGS LIST
AMC Networks Inc.
Corporate credit rating             BB-/Stable/--
Rating Assigned
$600 mil. Sr. unsec. notes due 2022 BB-
 Recovery rating                    4

Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

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