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Comcast Enters the $100 Billion Debt Club with Sky Deal

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Oct. 10 2018, Updated 3:55 p.m. ET

Comcast faces debt pressure

On October 2, Bloomberg reported that what Comcast (CMCSA) is borrowing to acquire Sky will put the company in the $100 billion debt club. Comcast’s debt level would nearly double to $114 billion, placing it after telecommunications providers AT&T (T) and Verizon (VZ). AT&T has a debt load of ~$190 billion as of June 30, and Verizon’s total debt reached $114.6 billion at the end of the second quarter.

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Comcast’s chances of getting full control of Sky

As we saw in the previous parts of this series, Comcast won the bidding war against Twenty-First Century Fox (FOXA) for 61% of London-based broadcaster Sky. The price of 17.28 pounds per share gives a better value to Sky shareholders than Fox’s bid of 15.67 pounds per share.

Comcast, which has valued the 61% of Sky at $38.8 billion, is waiting for Sky’s board of directors and shareholders to accept Comcast’s offer by October 11. Fox has also agreed to sell its 39% share in Sky to Comcast for $15.3 billion. Earlier, it had considered selling it to the Walt Disney Company (DIS).

Comcast’s credit rating

Credit rating agency Standard & Poor’s has given Comcast an A- rating with a negative outlook. Moody’s has given the company an equivalent A3 rating with a stable outlook. Moody’s also assigned A3 ratings to Comcast’s new bond offering of $27 billion.

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