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S&P ups Universal City
Standard & Poor's said that it raised the ratings on Universal City Development Partners Ltd. by two notches, including raising its corporate credit rating to BB- from B. S&P placed all ratings on Universal City on CreditWatch with positive implications.
NBCUniversal announced it entered into a definitive agreement to buy out the remaining 50% share of Universal City for about $1.025 billion from joint venture partner the Blackstone Group, the agency said. The transaction, expected to close July 1, will be financed with a combination of cash on hand at NBCUniversal, a $400 million intercompany loan from a Comcast entity as well as additional borrowings under NBCUniversal's revolving credit facility.
The upgrade of Universal City reflects strong trends in operating performance, which will continue at least through 2011 and result in the company's financial risk profile supporting the higher ratings on a stand-alone basis, the agency said.
The CreditWatch listing reflects the potential for further rating upside once S&P has greater clarity around the intended capital structure at Universal City upon close of the transaction and has assessed the extent to which NBCUniversal would support a wholly owned Universal City, the agency added.
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