CBS may get a credit upgrade

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Moody’s Investors Service seems to like the latest financial results from CBS Corporation. It has put the company’s credit ratings under review for a possible upgrade.


CBS has about $6 billion of debt rated by Moody’s. The ratings agency has placed CBS
Corporation’s Baa3 senior unsecured long-term debt ratings and Prime-3 short-term rating on review for possible upgrade.

“The review is prompted by the strong EBITDA and free cash flow growth, and sustained
deleveraging of the company over the last 18 months. The company’s leverage has declined steadily to 2.8x (incorporating Moody’s standard adjustments) at 6/30/2011, from 4.7x at 2009 year end, through balance sheet debt reduction as well as contributions to reduce its underfunded
pension liability,” Moody’s said.

The Moody’s review will focus on the ability and commitment of CBS to further reduce absolute levels of debt and sustain leverage under 2.5x, its propensity towards aggressive shareholder return strategies, and the impact of such strategies on cash flow conversion.