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S&P: News America notes BBB+
Standard & Poor's said it assigned a BBB+ rating to News America Inc.'s proposed $2.5 billion of new senior unsecured notes, consisting of $1.5 billion of 30-year unsecured notes and $1 billion of 10-year notes.
The proceeds have been earmarked for general corporate purposes and refinancing of near-term maturities, although the agency said it expects they could be directed toward future acquisitions.
News America Inc. is a wholly owned subsidiary of News Corp., which has guaranteed the issues.
The BBB+ corporate credit rating on parent News Corp. remains unchanged.
Growth in cable networks and TV helped to offset a 40% EBITDA decline in the film segment, which had several underperforming releases and faced difficult comparisons against strong home entertainment sales in the prior-year period, the agency said.
Film will continue to face difficult comparisons in the fiscal third quarter, since the large majority of box-office receipts for "Avatar" were generated in the March 2010 quarter, S&P said.
Moody's rates News notes Baa1
Moody's Investors Service said it assigned a Baa1 rating to News Corp.'s new $2.5 billion notes due 2021 and 2041.
The new notes, issued by News Corp.'s subsidiary, News America Inc., are unsecured obligations and will rank equally with all other existing and future unsecured debt of the company.
The proceeds will be used for general corporate purposes, fund acquisitions and debt maturities over the next few years, Moody's said.
The outlook is stable.
While the transaction will increase debt levels, profitability has and is expected to continue improving, the agency said, and the company's total debt-to-EBITDA leverage over the long-term will remain consistent with expectations.
The debt issuance strengthens the company's already solid liquidity position, takes advantage of strong credit market conditions and could help fund acquisitions, Moody's said.
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