S&P Global Ratings on Jan. 18 placed its 'B' corporate credit rating on Telecommunications Management LLC, which is doing business as NewWave Communications, on CreditWatch with positive implications after it agreed to be acquired by Cable One Inc.
Cable One agreed to acquire NewWave Communications in an all-cash deal valued at $735 million. S&P estimates that the pro forma leverage of the combined companies will be around 3.0x, which "compares to leverage of about 6.4x (last quarter annualized was 5.3x) at NewWave for the 12 months ended Sept. 30, 2016."
The rating agency expects that all of NewWave's existing debt will be repaid once the deal is complete. Consequently, S&P placed NewWave's rating on CreditWatch with positive implications as the agency is likely to raise the corporate credit rating to be the same as the agency's rating on Cable One, subsequently withdrawing all ratings on NewWave once the transaction is closed.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.