Virgin Media Affirmed At 'BB-'; VMED O2 UK Rated 'BB-'; Proposed Senior Secured Debt Rated 'BB-'; Outlooks Stable

U.K. cable operator Virgin Media Inc. (VMED) is planning to raise a total of £5.7 billion as part of its planned merger with Telefonica U.K. (O2). The proceeds are expected to be distributed as dividends to joint venture (JV) owners Liberty Global PLC and Spanish telecom operator Telefonica S.A. upon closing of the merger. The transaction will result in S&P Global Ratings-adjusted debt to EBITDA of about 5x in 2020 pro forma for the combined entity, compared with more than 6x for VMED on a stand-alone basis. We expect the merger to enhance VMED's scale, market shares, and cost structure, as well as medium-term growth prospects and churn. Along with improved credit metrics, this should result in an improved view

...September 8, 2020 - U.K. cable operator Virgin Media Inc. (VMED) is planning to raise a total of ú5.7 billion as part of its planned merger with Telefonica U.K. (O2). The proceeds are expected to be distributed as dividends to joint venture (JV) owners Liberty Global PLC and Spanish telecom operator Telefonica S.A. upon closing of the merger. The transaction will result in S&P Global Ratings-adjusted debt to EBITDA of about 5x in 2020 pro forma for the combined entity, compared with more than 6x for VMED on a stand-alone basis. - We expect the merger to enhance VMED's scale, market shares, and cost structure, as well as medium-term growth prospects and churn. Along with improved credit metrics, this should result in an improved view of VMED's stand-alone credit quality, compared with our current 'B+' stand-alone credit profile (SACP). - We are therefore affirming our '##-' long-term issuer credit and issue ratings on VMED and its senior secured debt, as well as our 'B' issue rating on VMED's...

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