Moody’s puts Comcast ratings on review for possible downgrade and says it may happen even if Fox rejects a bid
Moody’s Investors Service placed Comcast Corp.’s A3 debt rating on review for a possible downgrade on Thursday, after the cable giant confirmed that it is considering a bid for 21st Century Fox Inc. assets that Walt Disney Co. had agreed to acquire. “The review is prompted by the strong potential for a bid, and concerns over how aggressively it would be financed as an all-debt financed offer, and considering Comcast’s previously announced all-cash competing offer for Sky plc (Baa2; developing outlook),” Moody’s said in a statement. If the potential all-cash Fox bid is made, and both transactions are completed, it would raise pro forma leverage to around 4.1x debt-to-EBITDA, “and pro forma debt levels would be second only to that of the expected combination of AT&T Inc. (Baa1; on review for downgrade) and Time Warner Inc. (Baa2; stable),” said the agency. It added that concerns about Comcast’s commitment to financial policies that would be consistent with an A rating mean that the ratings could be downgraded, even if it makes an offer that is rejected by Fox shareholders. Comcast shares were down 1.2% and have fallen 21% in 2018 to date, while the S&P 500 has gained 1.7%.