Fitch applies BBB+ to Cox notes

Fitch Ratings said it assigned a BBB+ issue rating to Cox Communications, Inc.'s benchmark issuance of senior unsecured notes.

Net proceeds are to be used for debt repayment and overall liability management.

The outlook is stable.

Pro forma for the issuance and associated debt repayment, Cox Enterprises, Inc., Cox Communications’ parent, had about $17.5 billion of debt outstanding as of March 31, including roughly $10.4 billion outstanding at Cox Communications

Fitch said it measures Cox Enterprises’ core leverage excluding NextGear Capital Inc.'s debt and EBITDA. NextGear sources funding for its floorplan financing using cash from operations and debt, which was $3.3 billion as of March 31.

The agency's rationale to exclude NextGear's debt and EBITDA was driven by its belief that NextGear is not critical to Cox Auto's business model – although Fitch recognizes NextGear is complementary to Cox Auto's other businesses given the cross-selling opportunities, most of Cox Auto's businesses function autonomously.

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