04.12.2012 22:01
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AMC Networks Inc. -- Moody's changes AMC Network's (Ba3 CFR) rating outlook to positive from stable

New York, December 04, 2012 -- Moody's Investors Service changed AMC Network Inc.'s (AMC) (Ba3 Corporate Family Rating) rating outlook to positive from stable. The company's Ba3 CFR, Ba3 PDR (Probability of Default Rating), and SGL-2 Speculative Grade Liquidity rating remain unchanged.

The outlook change reflects the company's consistent focus on debt reduction over the past year, it having repaid over $250 million in debt and reduced leverage by about a turn since mid-2011. A demonstrated commitment by management to maintain a more conservative capital structure, and continued EBITDA growth and debt reduction that reduces leverage to the mid-3.0x range could result in an upgrade over the next 18 months. Moody's believes that proceeds from the settlement of the company's VOOM-related litigation with DISH Network Corporation (DISH) as well as growth in carriage fees will enhance debt reduction opportunities.

The settlement calls for a cash payout of $700 million, the proceeds of which would be shared between Ca blevision Systems Corporation (Cablevision) and AMC, and though the allocation of settlement proceeds between both parties is yet to be determined, we believe it may be significant enough for AMC to aid debt reduction. "We expect the company to apply a material portion of the settlement proceeds towards debt reduction, accelerating its de-leveraging trajectory relative to our initial expectations," stated neil Begley, a Moody's Senior Vice President. The settlement also resulted in the reinstatement of the carriage of AMC's networks on DISH, which accounts for about 13% of its subscriber base and which we believe accounts for a higher proportion of the company's EBITDA. "We believe this will support the company's strong growth prospects, as greater distribution of its networks and the continued success of its programming results in growth across its revenue streams - digital streaming and licensing fees, affiliate fees as well as advertising revenue," added Begley.

The following is a summary of today's rating actions:

Outlook Changes:

Issuer: AMC Networks, Inc.

.Rating Outlook Changed to Positive from Stable

RATINGS RATIONALE

AMC's Ba3 Corporate Family Rating reflects the company's positive and reliable free cash flow generation, aided by the contractual nature of over 50% of the company's revenue which is generated by carriage fees from pay TV providers. The rating is also impacted by AMC's relatively high, but moderating leverage of approximately 4.85x (incorporating Moody's standard adjustments, pro-forma for debt pay down in November 2012) at 9/30/2012. Moody's anticipates that the company will use free cash flow to pay down debt, and we expect leverage will decline to under 4.0x by the end of 2013. The rating incorporates the risk associated with customer and revenue concentration (approximately 50% from its AMC Network) and a highly competitive environment in which programming drives viewership and advertising revenues. It is also somewhat impacted by event risk concerns as the company's controlling owner, the Dolan family, has historically been comfortable with leveraging and transformative events. These risks remain balanced, however, by the company's desirable and well distributed cable networks which Moody's estimates could draw interest from strategic buyers in the double digit multiple range. The company also has a strong liquidity profile, as Moody's projects that it will generate over $200 million of annual free cash flow on average over the intermediate-term and will maintain a largely undrawn revolver of $500 million.

The positive rating outlook reflects our expectation for continued strong operating performance of the core networks (AMC, WE tv, IFC and Sundance Channel), and that strong free cash flow generation in addition to a portion of expected litigation settlement proceeds are used to repay debt. We anticipate the company will materially reduce leverage over the next 18-24 months and continue to maintain a solid liquidity profile.

An upgrade of the company's CFR could occur if management demonstrated and made a commitment to a less volatile and more fiscally conservative capital structure on a sustained basis. The rating could be upgraded if debt-to-EBITDA leverage is sustained at or below 3.5x.

The rating could be downgraded if management applies cash to fund returns to equity investors instead of reducing leverage. In addition, a view that values were materially diminishing for cable networks and/or any potential damage to the AMC brand, in particular, or a more constrained liquidity profile, could also put downward pressure on the company's ratings.

Please see ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.

The principal methodology used in rating AMC was the Global Broadcast and Advertising Related Industries Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

With its headquarters in New York, New York, AMC Networks, Inc. ("AMC) supplies television programming to cable, direct broadcast satellite and telecommunications service providers throughout the United States. The company predominantly operates four entertainment programming networks - AMC, WE tv, IFC and Sundance Channel.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history. The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Neil Begley Senior Vice President Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653John Diaz MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Dish Network Corp. nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
Buy: Kaufempfehlungen wie z.B. "kaufen" oder "buy"
Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
Sell: Verkaufsempfehlungn wie z.B. "verkaufen" oder "reduce"

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