Fitch has assigned a 'BBB+' rating to Comcast Corporation's (Comcast) $1.5 billion offering of senior unsecured notes: $900 million due 2018 and $600 million due 2037. The proceeds from the offering are expected to be used for general corporate purposes including reducing commercial paper balances. Comcast may also use a portion of the proceeds to purchase the 39.5% of E! Entertainment Television that they do not already own, should such an acquisition be consummated. The Rating Outlook for all of Comcast's ratings is Stable. As of Sept. 30, 2006, Comcast had approximately $27.2 billion of debt outstanding.
Fitch's ratings and Stable Rating Outlook continue to reflect Comcast's strong competitive position as the largest multiple system operator in the United States and Fitch's belief that the company will continue to generate solid operating metrics, sustainable EBITDA and free cash flow growth over Fitch's rating horizon. From Fitch's perspective Comcast's scale and strong system clustering provide the company with competitive advantages in terms of driving higher operating efficiencies through its cable plant, taking cost out of customer premise equipment, lowering programming costs, and positioning the company to develop programming internally or enter into key investments or partnerships to create content that can differentiate the company's offering from competition.
Fitch believes that the acquisition of cable systems from Adelphia and Time Warner Cable, Inc., which resulted in a net increase of approximately 1.7 million video subscribers, will further enhance Comcast's system clustering and drive additional economies of scale.
Fitch's Stable Rating Outlook reflects Fitch's expectation for Comcast to maintain credit quality and financial flexibility indicative of its 'BBB+' rating category, the continuation of strong operating metrics and the unfettered integration of the Adelphia, Time Warner Cable, Susquehanna Cable, and the Houston cable system from the Texas and Kansas City Partners subscribers. A more aggressive financial policy such as debt financed share repurchases or special dividends or an erosion of the company's operating metrics due to competitive factors could lead to a revision of the company's Rating Outlook.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
