Moody's affirms Cox

Moody's Investors Service said it affirmed Cox Communications, Inc.'s Baa3 senior unsecured and Prime-3 commercial paper ratings.

The outlook remains positive.

The positive outlook reflects Moody's expectation that Cox Communications' 3.2 times debt-to-EBITDA ratio will improve to under 3 times by 2010 through modest debt reduction and EBITDA growth. Previously, the agency had expected this improvement to occur by 2009, but it now believes the credit metric improvement will not occur until 2010 because the company spent more than anticipated on acquisitions, wireless spectrum and dividends to parent company Cox Enterprises, Inc. in 2008.

Moody's said the Baa3 rating reflects the superior operating performance of Cox Communications' cable operations, its position as an industry leader in launching new products, limited intermediate-term competition relative to its larger cable peers and relatively conservative financial policies and history.

The rating, however, is constrained by the risk that Cox Communications could weaken its liquidity profile by continuing to pay dividends to Cox Enterprises in order to mitigate its parent's worsening leverage profile, the agency said.

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