S&P affirms Disney

Standard & Poor's said it affirmed its ratings on Walt Disney Co., including the A long-term and A-1 short-term corporate credit ratings.

The agency said it also removed the ratings from CreditWatch, where they were placed with negative implications on Aug. 31, in response to Disney's announcement that it agreed to acquire Marvel Entertainment Inc. for about $4 billion, with a mixture of stock and cash.

The outlook is negative.

"Despite a further increase in Disney's leverage as a result of the Marvel acquisition and ongoing weakness in most of Disney's businesses because of the recession, the company should have sufficient earnings and cash flow to restore its leverage metrics to below our 2.0x threshold for the A rating within the next 18-24 months, in our view," said S&P credit analyst Deborah Kinzer.

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