Welcome!

News Feed Item

Fitch Rates Comcast's Sr. Unsecured Notes 'A-'; Outlook Stable

Fitch Ratings has assigned an 'A-' rating to Comcast Corporation's (Comcast) benchmark size, senior unsecured notes maturing 2024 and 2044. Proceeds from the offering are expected to be used for general corporate purposes which may include the repayment of amounts outstanding under the company's commercial paper program and a portion of NBCUniversal's $900 million principal amount of 2.1% notes due April 2014. The notes will be guaranteed by Comcast's subsidiaries included in the company's cross-guaranty structure. The Rating Outlook for all of Comcast's ratings is Stable. As of Dec. 31, 2013 Comcast had approximately $48.6 billion of debt outstanding, including $11.2 billion outstanding at NBCUniversal Media, LLC (NBCUniversal).

KEY RATING DRIVERS

--Comcast's pending merger with TWC is strategically sound and creates significant opportunity to realize operating and capital spending efficiencies with minimal execution risk and enables the combined entity to effectively compete on a national scale for incremental commercial segment business.

--The all-stock consideration structure of the merger with TWC is not expected to have a material impact on Comcast's credit protection measures.

--Comcast's capital structure and financial strategy remains intact and centered on reducing leverage to its target of between 1.5x and 2.0x.

--Fitch does not expect any material change to Comcast's capital allocation strategy over the near term and believes there is sufficient capacity within the ratings to accommodate a contemplated expansion of Comcast's share repurchase authorization.

Comcast's ratings reflect its strong competitive position as one of the largest video, high-speed Internet and phone providers to residential and business customers in the U.S. and the company's compelling subscriber clustering profile. In Fitch's view, NBCUniversal's size, scale, leading brand positions, and diversity of operations and business risk as one of the world's leading media and entertainment companies, all lower the business risk attributable to Comcast's credit profile. These factors also create new avenues for revenue and cash flow growth while limiting the near-term impact on Comcast's balance sheet and credit profile.

The pending merger with TWC enables Comcast to extend its operating strategies and technology roadmap into TWC's operations, creating the opportunity to realize material operating cost and capital spending efficiencies. Fitch points out that Comcast's cable-segment EBITDA margin was nearly 500 basis points higher than the comparable TWC EBITDA margin during the year ended 2013. Comcast's ability to successfully establish its key operating strategies within TWC's legacy operations creates a potential $1 billion EBITDA benefit for the combined entity. Additionally, the national scope of the combined entities' cable infrastructure will position the company to effectively compete for a higher tier commercial business. Combined commercial-segment revenues totaled approximately $5.5 billion during 2013, representing the second-fastest growing business segment of the combined entity. Fitch anticipates the merger with TWC will close by the end of 2014.

Fitch estimates that approximately $73.6 billion of debt and preferred stock was outstanding as of Dec. 31, 2013 on a pro forma basis translating into pro forma leverage of 2.5x. The pro forma leverage represents a modest increase relative to Comcast's actual leverage of 2.2x (Fitch calculation). Fitch expects Comcast's credit profile will strengthen on a pro forma basis with consolidated pro forma leverage of 2.2x by year-end 2014, approaching 2x by the end of 2015 in the absence of significant cost or operating synergies.

Comcast's liquidity position and overall financial flexibility are strong based on Fitch's expectation that the company will continue to generate material amounts of free cash flow (FCF). Fitch acknowledges that Comcast's share repurchase program represents a significant use of cash; however, Fitch believes that the company would reduce the level of share repurchases should the operating environment materially change, in order to maximize financial flexibility. The liquidity position is further supported by cash on hand (which totaled $1.7 billion on a consolidated basis as of Dec. 31, 2013) and $4.7 billion of collective available borrowing capacity (as of Dec. 31, 2013) from Comcast's two revolving credit facilities. Commitments under Comcast's $6.25 billion revolver will expire during June 2017 while the commitments related to NBCUniversal Enterprise's $1.35 billion revolver expire during March 2018.

Comcast's debt maturity profile is well-laddered and within Fitch's FCF expectation. Maturities total approximately $1.9 billion during 2014 (including $900 million at NBCUniversal Media) excluding outstanding commercial paper, followed by $3.4 billion during 2015.

RATING SENSITIVITIES:

--A positive rating action would likely coincide with Comcast achieving and committing to a financial policy consistent with an 'A' rating, including maintaining its leverage below 1.5x on a sustained basis. Comcast would need to demonstrate that its operating profile will not materially decline in the face of competition and less than robust housing and employment conditions.

--Negative rating actions would likely coincide with discretionary actions of Comcast's management including, but not limited to, the company adopting a more aggressive financial strategy, or event-driven merger and acquisition activity, that drive leverage beyond 2.5x in the absence of a credible deleveraging plan.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (Aug. 5, 2013);

--'Rating Telecom Companies' (Aug. 9, 2012).

Applicable Criteria and Related Research:

Rating Telecom Companies

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=682323

Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715139

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=821038

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE '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. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that AppNeta, the leader in performance insight for business-critical web applications, will exhibit and present at SYS-CON's @DevOpsSummit at Cloud Expo New York, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. AppNeta is the only application performance monitoring (APM) company to provide solutions for all applications – applications you develop internally, business-critical SaaS applications you use and the networks that deli...
SYS-CON Events announced today that Zerto will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Zerto is committed to keeping enterprise and cloud IT running 24/7 by providing innovative, simple, reliable and scalable business continuity software solutions. Through the Zerto Cloud Continuity Platform™, organizations can seamlessly move and protect virtualized workloads between public, private and hybrid clou...
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in Embedded and IoT solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/Big Data, HPC and ...
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
SYS-CON Events announced today that IBM Cloud Data Services has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. IBM Cloud Data Services offers a portfolio of integrated, best-of-breed cloud data services for developers focused on mobile computing and analytics use cases.
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
@DevOpsSummit taking place June 7-9, 2016 at Javits Center, New York City, and Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with the 18th International @CloudExpo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world.
SYS-CON Events announced today that ContentMX, the marketing technology and services company with a singular mission to increase engagement and drive more conversations for enterprise, channel and SMB technology marketers, has been named “Sponsor & Exhibitor Lounge Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York. “CloudExpo is a great opportunity to start a conversation with new prospects, but what happens after the...
As organizations shift towards IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. Commvault can ensure protection, access and E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his general session at 18th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Part...
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...
Customer experience has become a competitive differentiator for companies, and it’s imperative that brands seamlessly connect the customer journey across all platforms. With the continued explosion of IoT, join us for a look at how to build a winning digital foundation in the connected era – today and in the future. In his session at @ThingsExpo, Chris Nguyen, Group Product Marketing Manager at Adobe, will discuss how to successfully leverage mobile, rapidly deploy content, capture real-time d...
What a difference a year makes. Organizations aren’t just talking about IoT possibilities, it is now baked into their core business strategy. With IoT, billions of devices generating data from different companies on different networks around the globe need to interact. From efficiency to better customer insights to completely new business models, IoT will turn traditional business models upside down. In the new customer-centric age, the key to success is delivering critical services and apps wit...
How will your company move to the cloud while ensuring a solid security posture? Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is ...