OREANDA-NEWS. S&P Global Ratings said today that it placed its 'B+' corporate credit rating on San Marcos, Texas-based cable TV overbuilder Grande Communications Networks LLC on CreditWatch with negative implications.

"The CreditWatch placement follows the announcement that the company's private equity sponsors, ABRY Partners, have agreed to sell Grande and RCN Telecom LLC to TPG Capital for $650 million and $1.6 billion, respectively," said S&P Global Ratings' credit analyst William Savage. We expect the assets of Grande and RCN to be combined into a new entity. In our view, the combined debt-to-EBITDA leverage at the new entity will likely be greater than 5.0x given private equity sponsorship and debt-to-EBITDA leverage at RCN, which was 5.4x on March 31, 2016.

In resolving the CreditWatch placement, we will be discussing the strategic implications of the sale to TPG Capital and combination with RCN Telecom with management, as well as discussing the proposed capital structure. We intend to resolve the CreditWatch placement over the coming months, with the expectation that if leverage were to exceed 5x, we would likely downgrade the company by one notch.