Moody’s Investors Service said Friday, August 2, that all ratings for UPC Holding BV and its rated subsidiaries remain under review for downgrade where they were placed earlier this year following the announcement that UPC’s parent company Liberty Global plc had agreed to acquire Virgin Media Inc in the UK.
The ongoing review for downgrade will now also consider whether UPC’s shareholder loans (EUR8.7 billion as of March 31 2013) meet the criteria specified for equity treatment in light of Moody’s recent publication of its new methodology Debt and Equity Treatment for Hybrid Instruments of Speculative-Grade Nonfinancial Companies.
In a press release Moody’s has said that UPC’s shareholder loans do not currently fully meet the new methodology’s criteria for equity treatment. If relevant terms of the shareholder loans are not amended to meet these criteria, this could by itself have a negative impact on UPC’s Corporate Family Rating, but not on its Probability of Default Rating or the various instrument ratings. Moody’s aims to conclude the review over the next few weeks.
The principal methodology used in these ratings was the Global Pay Television – Cable and Direct-to-Home Satellite Operators published in April 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada and EMEA published in June 2009.
UPC is a pan-European cable provider, a principal subsidiary of Liberty Global plc. In 2012, the company generated EUR4.3 billion in revenue and EUR2.1billion in reported operating cash flow.
