Moody’s Investors Service upgraded the credit ratings for privately held cable operator Mediacom Communications, adding that the small-market MSO has improved its leverage ratio substantially since going private in 2011.
Moody’s upgraded Mediacom’s Corporate Family Rating (CFR) to Ba3 from B1 and its Probablility of Default Rating to Ba3-PD from B1-PD. The credit rating agency also changed its outlook on the cable operator to stable from positive.
Improved credit ratings typically mean a company has greater access to cheaper capital.
According to Moody’s, it took the action because Mediacom has lowered its debt-to-cash flow leverage ratio from about 6.7 times in 2011 when it completed plans to go private, to about 5.1 times in September 2014. Moody’s estimated that Mediacom would continue using its free cash flow to pay down debt and could bring that leverage ratio below 5 times this year. Since going private, Moody’s said Mediacom has repaid about $450 million in debt.