The following is a press release from Standard & Poor's:
NEW YORK (Standard & Poor's) March 25, 2004--Standard & Poor's Ratings
Services said today that its ratings for Bethpage, N.Y.-based cable TV
operator Cablevision Systems Corp. remain on CreditWatch with negative
implications. "The ratings were originally placed on CreditWatch July 9, 2003,
because of concerns about the company being investigated by the SEC," said
Standard & Poor's credit analyst Catherine Cosentino. However, the independent
law firm, Wilmer, Cutler & Pickering, has since completed its own
investigation of accounting irregularities and reported its findings to the
company's audit committee and independent auditor, KPMG.
As a result, Cablevision was able to file its 2003 10K, which included a
nonqualified report from KPMG. Given these developments, it is not expected the
SEC investigation will have a material impact on the company's credit profile.
However, the ratings remain on CreditWatch with negative implications because
of the uncertainty regarding the company's ability to complete its planned
spin-off of its satellite broadcast business and a significant portion of its
programming businesses later this year. Failure to complete the spin-off in
2004 could materially weaken the company's credit profile.
The company plans to spin off its satellite business in 2004 under a revised
plan announced in October. However, the spin-off requires a refinancing of the
Rainbow debt by the spun-off company, and a failure to secure such financing
would cause the spin-off plans to be terminated. If the spin-off does not
occur, the ratings could be subject to downgrade, given the uncertainty
regarding the incremental financing requirements for the satellite broadcast
business, including the possibility that additional satellites could be
launched. Moreover, Cablevision's overall business risk would be somewhat
weaker, as prospects for the satellite business remain uncertain given the high
degree of competition from DBS operators DIRECTV and EchoStar, which
collectively have more than 20 million subscribers. Assuming no material change
in the company's business position or financial profile, it is expected that,
upon completion of the spin-off on current terms, ratings at Cablevision and
its operating entities would be affirmed, with a developing outlook. Complete
ratings information is available to subscribers of RatingsDirect, Standard &
Poor's Web-based credit analysis system,
