S&P rates UPCB notes, loan B+

Standard & Poor's said that it assigned a B+ issue rating to the proposed $1 billion of senior secured notes to be issued by special purpose vehicle UPCB Finance III Ltd.

S&P said proceeds from the proposed notes will be passed to UPC Financing Partnership, UPC Broadband Holding BV (B+/positive) and its subsidiaries via a back-to-back loan, which was assigned a B+ issue rating with a 3 recovery rating, reflecting the expectation of meaningful (50%-70%) recovery in the event of a payment default.

The rating on the notes is based on the notes' first-ranking security interest over UPCB Finance III's rights to, and benefit in, the proposed loan, which has in turn all the same rights as a lender under the UPC group's existing bank facility, the agency said.

The rating on the proposed loan is based on the understanding that the facility will be part of the existing credit agreement and will thereby share the same guarantee and security package as that granted to the existing secured creditors, S&P said.

The loan proceeds will be fully used to reduce outstanding amounts under the UPC group's existing secured bank debt.

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