The notes rank pari passu with ONO's existing senior secured facilities and senior secured notes.

The proceeds of the offering of the notes (converted into euro), together with borrowings under the new senior facility which was entered into on 24 May 2012 and available cash, were used to refinance in full its 2005 senior facility. Through this refinancing, the maturities of substantially all of ONO's financial indebtedness have been extended to 2017 and beyond.

RATINGS RATIONALE

Moody's definitive rating on this debt obligation is in line with the provisional rating assigned on 30 May 2012.

The B1 rating that Moody's has assigned to the notes is one notch higher than ONO's B2 CFR, reflecting the impact of the presence of junior debt in the company's capital structure. This primarily comprises a total of EUR460 million worth of senior subordinated notes due in 2019 issued by ONO Finance II Plc.

Moody's notes that an upgrade of ONO's CFR to B1 may not necessarily translate into a notch-for-notch upgrade of the senior secured debt instruments to Ba3, given that the LGD rate of these instruments is 43%.

ONO's B2 CFR reflects the uncertainties surrounding the macroeconomic environment in Spain (Baa3, on review for downgrade), where ONO generates 100% of its cash flows. Moody's notes that a further deterioration in the country's macroeconomic situation could affect ONO's operating performance and, over the longer term, reduce the company's headroom under the financial covenants of its new credit facility, which will tighten over time, thereby exerting pressure on its liquidity profile. However, ONO's rating also reflects the company's position as Spain's largest cable operator and leading alternative provider of telecommunications, broadband and internet and pay-TV services.

On 25 May 2012, Moody's changed the outlook on ONO's rating to positive from stable to reflect the substantial improvement in ONO's liquidity profile following its successful refinancing of the outstanding amounts under its existing senior credit facility. The positive outlook also reflects ONO's very resilient recent operating performance in a challenging environment, with the company reporting revenue growth over the past four quarters. ONO's EBITDA has also grown, to EUR748 million in FY2011 from EUR725 million in FY2010, enabling the company to reduce leverage. Moreover, ONO's adjusted debt/EBITDA stood at 5.0x in FY2011 vs. 5.3x a year earlier. Moody's believes that ONO will be able to maintain this positive momentum by further improving its triple-play penetration (cable, internet and telephony services), helped by its technologically advanced networks and new product offerings such as TiVo.

In addition, Moody's expects that ONO will report growing positive free cash flow generation in the medium term, although the company's cash flow generation will be more limited than historical levels, primarily because of the higher cost of debt of the new financing. The repayment schedule of the new facility has been aligned with the expected cash flow generation of the company in the first few years of its business plan. Nevertheless, Moody's notes a concentration of debt maturities in 2017-2018.

The positive outlook also indicates that upward pressure on the rating could build over the next 12-18 months in the event that ONO delivers on its budget, and if there is better visibility with regard to the macroeconomic environment in Spain and the impact that it could have on the company's performance.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the ratings will hinge on the ability of ONO's management to deliver on its business plan, while continuing with its deleveraging efforts, such that debt/EBITDA (as adjusted by Moody's) trends below 5.0x and the company generates growing positive free cash flow.

Upward pressure on the ratings could be tempered if a significant deterioration in the macroeconomic environment in Spain were to affect ONO's prospects of successfully implementing its business plan. This would lead to a stabilisation of the rating outlook.

Downward ratings pressure could arise as a result of (i) a failure by ONO to deliver operational performance that is in line with Moody's estimates (whether as a result of strategic or operational issues or a more material deterioration of the domestic macroeconomic environment); or (ii) Moody's were to become concerned about ONO's liquidity as a result of a reduction in headroom under the company's financial covenants.

The principal methodology used in rating Nara Cable Funding Limited was the Global Cable Television Industry Methodology published in July 2009. 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.

Headquartered in Madrid, Cableuropa S.A.U. (ONO) is Spain's largest cable operator and leading alternative provider of telecommunications, broadband and internet and pay-TV services. It is the only cable operator in the country with national coverage. In FY2011, ONO reported revenues of around EUR1.5 billion and EBITDA of EUR748 million.

REGULATORY DISCLOSURES

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.

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Ivan Palacios Vice President - Senior Analyst Corporate Finance Group Calle Principe de Vergara, 131, 6 Planta Madrid 28002 SpainPaloma San Valentin MD - Corporate Finance Corporate Finance Group JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 Releasing Office: Moody's Investors Service Espana, S.A. Calle Principe de Vergara, 131, 6 Planta Madrid 28002 Spain JOURNALISTS: 44 20 7772 5456 SUBSCRIBERS: 44 20 7772 5454 (C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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