S&P assigns B to CSC notes

S&P said it assigned a B issue-level rating to Altice USA Inc.'s planned $1 billion of guaranteed notes due 2028 issued via CSC Holdings LLC. The recovery rating is 3 indicating meaningful (50%-70%; 65% rounded estimate) recovery.

The company plans to use proceeds for general corporate purposes, which may include refinancing debt and capital expenditures. “In the interim, we expect the company to temporarily repay borrowings under the 2027 revolver, which totaled about $1.6 billion as of Dec. 31, 2022, given that the next debt maturity (totaling $750 million) is not until June 2024. There is no impact to our existing ratings because this transaction is neutral for leverage,” S&P said in a press release.

“We view this transaction favorably from a liquidity perspective, as this alleviates pressure until at least 2025 and likely until 2027. We estimate the company will have about $1.8 billion of liquidity to begin 2025, consisting primarily of revolver availability. However, we estimate the revolver will likely still be drawn by about $800 million by the end of 2024. The revolver currently matures on April 17, 2025, unless the $1.5 billion term loan B (which matures July 2025) has been fully repaid or the maturity has been extended beyond July 2027,” the agency added.

The outlook is negative.

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