Moody’s rates CCO bonds B1

Moody's Investors Service said it assigned a B1 rating to the proposed senior unsecured bonds of CCO Holdings, LLC, a wholly owned subsidiary of Charter Communications, Inc.

The company expects to use proceeds, along with previously committed secured bank debt, primarily to fund the purchase of assets pursuant to its April 25, 2014, agreement with Comcast Corp. (A3 positive).

All other ratings, including Charter's Ba3 corporate family rating, are unchanged.

Moody's estimates the debt funded acquisition will increase Charter's leverage to the mid 5 times debt-to-EBITDA range from 4.7 times (based on trailing 12 months through June 30). The pro forma leverage profile is consistent with a Ba3 corporate family rating, and assuming the transaction occurs as proposed, Moody's believes Charter will benefit from enhanced scale and improved geographic clustering, offsetting some execution risk, and that the transaction will be accretive to free cash flow.

The agency also expects EBITDA growth and free cash flow generation to facilitate a decline in leverage over the next few years.

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