Even in this recession, cable giant Comcast is paying down debt and improving its balance sheet. Moody’s Investors Service has rewarded Comcast by upgrading some of its credit ratings. Moody’s ratings actions cover some $32 billion of Comcast debt.
Moody’s upgraded Comcast’s long-term senior unsecured debt ratings to Baa1 from Baa2. The rating outlook is stable. This action does not affect Comcast’s Prime-2 short-term rating and concludes the review for upgrade initiated on February 9, 2009, Moody’s reported.
“The upgrade reflects Moody’s expectation that Comcast’s credit metrics, particularly the company’s 2008 debt-to-EBITDA leverage of 2.7x (incorporating Moody’s standard adjustments), will continue to improve in 2009 given the company’s ability to strengthen its balance sheet through absolute debt reduction and operational improvements, and management’s commitment to sustaining a strong balance sheet which we believe will cause debt-to-EBITDA leverage to be sustained under 2.5x. Moody’s believes the predictability of Comcast’s subscription revenue streams, the expectations for continuing though moderating revenue growth, and stable capital spending requirements solidly position the company to increase profitability and free cash flow. This affords Comcast much financial flexibility and discretion to manage its own financial condition and sustain the Baa1 rating. Moody’s view is supported by the expectation that the company’s revenue and cash flow will continue to grow in the low-to-mid single digit range over the intermediate-term, driven primarily by increased penetration of Comcast’s high-speed data and voice products despite moderately increasing competition from RBOCs,” Moody’s said in its analysis.
“Comcast’s ratings and stable outlook are supported by its non-cyclical cash flows and steady operating margins generated from its large geographically diverse portfolio of cable systems, and by market power resulting from its position as the nation’s largest cable TV system operator,” the ratings agency added.
Moody’s has taken the following rating actions:
Upgrades:
..Issuer: Comcast Corporation
….Senior Unsecured Debt, Upgraded to Baa1 from Baa2
..Issuer: Comcast Cable Communications Holdings, Inc.
….Senior Unsecured Debt, Upgraded to Baa1 from Baa2
..Issuer: Comcast Cable Communications, Inc.
….Senior Unsecured Debt, Upgraded to Baa1 from Baa2
..Issuer: Comcast Cable Holdings, LLC
….Senior Unsecured Debt, Upgraded to Baa1 from Baa2
..Issuer: Comcast Holdings Corporation
….Guaranteed Subordinated Exchangeable Debt, Upgraded to Baa2 from Baa3
….Subordinated Exchangeable Debt, Upgraded to Baa3 from Ba1
….Senior Subordinated Debt, Upgraded to Baa2 from Baa3
..Issuer: U S WEST Capital Funding, Inc. (Old) (aka: Comcast MO Group, Inc.)
….Senior Unsecured Regular Bond/Debenture, Upgraded to Baa1 from Baa2
Outlook Actions:
..Issuer: Comcast Corporation
….Outlook, Changed To Stable from Rating Under Review
..Issuer: Comcast Cable Communications Holdings, Inc.
….Outlook, Changed To Stable from Rating Under Review
..Issuer: Comcast Cable Communications, Inc.
….Outlook, Changed To Stable from Rating Under Review
..Issuer: Comcast Cable Holdings, LLC
….Outlook, Changed To Stable from Rating Under Review
..Issuer: Comcast Holdings Corporation
….Outlook, Changed To Stable from Rating Under Review
..Issuer: U S WEST Capital Funding, Inc. (Old) (aka: Comcast MO Group, Inc.)
….Outlook, Changed To Stable from Rating Under Review
