Adelphia Debt Rating Cut to ‘Negative’

Adelphia Communications had the rating outlook on its debt and preferred stock cut to “negative” by Moody’s Investors Service. Moody’s lowered the outlook in part because of the large capital expenditures Adelphia is planning for system upgrades. It also took into account the possibility of slower subscriber growth in a saturated market and more competition from direct-broadcast satellite providers. Moody’s said it expects that Adelphia will have to continue borrowing money.

The ratings affect about $20 billion of debt and preferred stock and include all of Adelphia’s units. Moody’s also gave Adelphia Business Solutions unit a “negative” outlook. Moody’s said it is reasonable to assume that the unit is out of cash or will be shortly.

Shares of Adelphia rose 55 cents to $33.51 on Nasdaq. They had fallen 36% this year.