On June 2, 2006, Standard&Poor's Ratings Services placed its ratings on Cogeco Cable Inc., including its long-term 'BB+' corporate credit rating, on CreditWatch with negative implications, following Cogeco's announcement that it has entered into an agreement to purchase the second-largest cable TV operator in Portugal, Cabovisao-Televisao por Cabo S.A. The CreditWatch placement reflects an expected material weakening of the company's financial metrics resulting from the debt-financed acquisition. The purchase price of Euro 465 million (C$661 million), which equates to a 12.6x trailing 12 months reported EBITDA, will be debt financed and should materially increase Cogeco's lease-adjusted debt to EBITDA, while other credit metrics should weaken correspondingly. Lease-adjusted debt levels are expected to increase by 82% to about C$1.5
