Research Update: Radiate Holdco LLC 'B' Rating Affirmed On Predictable Earnings Growth Following Dividend; Debt Rated

U.S.-based cable provider Radiate Holdco LLC plans to raise new debt to fund a dividend to shareholders and repay all existing debt that will result in pro-forma adjusted debt to EBITDA rising to 7.2x from 6.4x for the last-12-months ended June 30, 2020. We are affirming our 'B' issuer credit rating because we believe the company will restore leverage to below 7x within the next year given increasing demand for high-margin residential internet connections that we project (combined with the absence of one-time COVID-19 costs) will result in EBITDA growth of 6%-8% for at least the next two years. We have also increased our estimated stressed enterprise value (EV) used in our recovery analysis to reflect recent fiber investments and

...- U.S.-based cable provider Radiate Holdco LLC plans to raise new debt to fund a dividend to shareholders and repay all existing debt that will result in pro-forma adjusted debt to EBITDA rising to 7.2x from 6.4x for the last-12-months ended June 30, 2020. - We are affirming our 'B' issuer credit rating because we believe the company will restore leverage to below 7x within the next year given increasing demand for high-margin residential internet connections that we project (combined with the absence of one-time COVID-19 costs) will result in EBITDA growth of 6%-8% for at least the next two years. - We have also increased our estimated stressed enterprise value (EV) used in our recovery analysis to reflect recent fiber investments and edge out activity, a successful integration of Wave assets, and modest EBITDA benefit from the planned acquisition of enTouch. - Therefore, we have assigned a 'B' issue-level rating and '3' recovery rating to Radiate's proposed secured debt and a '###+' issue-level...

Research Update