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TEXT-Fitch rates Cableuropa's Nara Cable issue 'BB-(exp)'
May 30, 2012 / 2:47 PM / 5 years ago

TEXT-Fitch rates Cableuropa's Nara Cable issue 'BB-(exp)'

May 30 - Fitch Ratings has assigned Nara Cable Funding's proposed 2018
senior secured US dollar issue an expected rating of 'BB-(exp)' and an expected
Recovery Rating of 'RR2'. Nara Cable is a finance vehicle for Cableuropa S.A.	
The final rating of the notes is subject to the completion of the transaction
and final terms conforming to information received and reviewed by Fitch.	
The transaction is part of the company's ongoing refinancing programme, and will
replace some of the recently signed EUR1.4bn senior bank facility. With the
maturity of most of the company's debt now falling in 2017 and beyond,
Cableuropa's debt profile has been efficiently managed and potential pressures
Cableuropa's Long-term Issuer Default Rating (IDR) of 'B'/Positive takes into
account the company's revenue and cash flow resilience, despite a difficult
economy and communications market. Revenues are currently growing, up 5% in Q112
and EBITDA margins in the high forties/low fifties (48.6% in Q112) remaining
strong. Net debt to EBITDA leverage of 4.5x is low for the rating level, which
in combination with successful refinancing activity support the Positive
Recent financing activity has had the effect of pushing up notional borrowing
costs. Solid free cash flow generation and modest top-line growth should however
support deleveraging trends. Net debt to EBITDA consistently trending below 4.5x
combined with solid ongoing free cash flow could lead to a higher rating.	
Fitch cautions that the closing of the current issue will push dollar
denominated debt above USD1.5bn. With no overseas earnings, a currency mismatch
exists, with in Fitch's view, eurozone concerns likely to sustain euro weakness
at least in the near term. High rates of unemployment, the collapse of the
property sector and uncertain long term effects of austerity in Spain, underpin
caution in the rating, despite financial metrics that provide ratings headroom.	
Additional information is available at	
The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.	
Applicable criteria, 'Corporate Rating Methodology', dated 12 August 2011;
'Rating Global Telecoms Companies', dated 16 September 2010; 'Cashflow Measures
in Corporate Analysis', dated 12 October 2005; and 'Recovery Ratings and
Notching Criteria for Non-Financial Corporate Issuers', dated 5 May 2011, are
available on	
Applicable Criteria and Related Research:	
Corporate Rating Methodology	
Rating Global Telecoms Companies - Sector Credit Factors	
Cash Flow Measures in Corporate Analysis	
Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers

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