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.
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.