Fitch Affirms Mediacom's IDR at 'B'; Outlook Remains Stable

Fitch Ratings has affirmed the 'B' Issuer Default Rating (IDR) for Mediacom Communications Corporation (Mediacom) and its wholly owned subsidiaries Mediacom LLC and Mediacom Broadband LLC (see complete listing of ratings affirmed below). In addition Fitch has assigned a 'BB/RR1' rating to Mediacom Broadband LLC's $300 million incremental term loan E. Lastly, Fitch has upgraded Mediacom LLC's senior unsecured debt to 'B-/RR5' from 'CCC+/RR6'. Approximately $3.2 billion of debt as of March 31, 2008 is affected. The Rating Outlook for all of Mediacom's ratings is Stable.

Fitch's ratings reflect Mediacom's relatively high leverage and an operating profile that continues to lag behind comparable cable multiple system operators. Mediacom's service penetration rates and ARPU profile trail industry leaders as well as comparable rural oriented cable operators. The ratings incorporate Mediacom's prospects to generate free cash flow during the current ratings horizon, which in turn can be used to de-lever its balance sheet. Fitch acknowledges Mediacom's history of debt funded share repurchases and expects that the use of anticipated future free cash flow generation will be balanced between funding continued share repurchases and improving Mediacom's credit profile by reducing debt.

Mediacom doubled its share repurchase activity during 2007 and the prospect of continued aggressive shareholder friendly actions is a key rating issue going forward. Mediacom's board of directors has approved a new $50 million share repurchase authorization. Fitch expects the pace of share repurchases to moderate relative to 2007 levels.

Additionally the ratings incorporate the increasing business risk attributable to Mediacom's credit profile stemming from the persistent competitive threat from direct broadcast satellite (DBS) operators. Fitch acknowledges that Mediacom's rural and suburban service territory provides a buffer to the facilities based video competition from the large incumbent telephone companies as the telephone companies have concentrated their respective video deployments on larger metropolitan areas. Moreover the competitive overlap with Verizon Communications, Inc. and AT&T, Inc. is minimal. Fitch expects that Mediacom will face additional competitive pressures in its southeast markets as AT&T builds its U-verse network in the former BellSouth territories.

Mediacom's ratings are supported by a stable liquidity position and Fitch's expectation of further revenue and RGU growth and diversification coupled with a continued penetration of the company's triple play offering as the company continues to close the existing penetration differential between its high speed data, digital video products and triple play service offering take rates with that of industry norms. Fitch believes that Mediacom's triple play service offering, coupled with the expansion of Mediacom high definition (HD) offering and the introduction of a higher and lower speed high speed data (HSD) product tiers enhances Mediacom's competitive positioning.

The 'RR1' Recovery Rating assigned to Mediacom LLC and Mediacom Broadband LLC's senior secured credit facilities indicates superior recovery prospects, which are based on the asset coverage of these loans. The 'RR5' Recovery Ratings assigned to the senior unsecured debt issued by Mediacom Broadband and Mediacom LLC reflect the diminished recovery prospects of bondholders at this level of the capital structure driven by the large amount of senior secured debt ahead of these bonds in the capital structure.

The Stable Outlook incorporates Fitch's expectation that Mediacom's credit profile will continue to improve during 2008 driven by steady operating metrics, including subscriber growth, ARPU, revenue and EBITDA growth. Improvement within these metrics should lead to free cash flow generation during 2008 after considering elevated capital expenditures during 2008. Fitch expects Mediacom's capital expenditures to moderate during 2009 further positioning the company to strengthen free cash flow generation. The Stable Outlook also reflects Fitch's belief that Mediacom will become more balanced with its share repurchase policy.

Fitch has affirmed the following ratings with a Stable Outlook:

Mediacom Communications Corporation

--IDR at 'B'.

Mediacom Broadband LLC

--IDR at 'B';

--Senior Unsecured Debt at 'B-/RR5'.

Mediacom LLC

--IDR at 'B'.

Mediacom Illinois LLC

Mediacom Arizona LLC

Mediacom Indiana LLC

Mediacom California LLC

Mediacom Minnesota LLC

Mediacom Delaware LLC

Mediacom Wisconsin LLC

Mediacom Southeast LLC

Mediacom Iowa LLC

Zylstra Communications Corporation

--IDR at 'B'

--Senior secured at 'BB/RR1'.

MCC Georgia, LLC

MCC Illinois, LLC

MCC Iowa, LLC

MCC Missouri, LLC

--IDR at 'B'

--Senior secured at 'BB/RR1'.

Fitch has also upgraded the following ratings:

Mediacom LLC

--Senior unsecured to 'B-/RR5' from 'CCC+/RR6'.

Additionally, Fitch has assigned the following new ratings:

MCC Georgia, LLC

MCC Illinois, LLC

MCC Iowa, LLC

MCC Missouri, LLC

--$300 million incremental term loan E 'BB/RR1'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

SOURCE: Fitch Ratings

Fitch Ratings
David Peterson, +1-312-368-3177, Chicago
Michael Weaver, +1-312-368-3156, Chicago
Media Relations:
Brian Bertsch, +1-212-908-0549, New York

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