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Monday, February 9, 2009

Comcast growing out of debt: Moody's

The perennial debt-laden cable TV business -- or at least its biggest player, Philadelphia's Comcast Corp. -- has been making so much money from Internet and phone service that it's becoming a more desirable borrower, at a time when most corporate borrowers find it harder to raise cash.

Moody's Investors Service may upgrade $32 billion in Comcast Corp.'s long-term senior unsecured debt from its current Baa2. Before deciding, the credit rating agency will review Comcast's growth prospects, competitive position, cash flow, and the impact of "the contracting U.S. economy." If Moody's boosts the rating, Comcast may be able to borrow money at lower rates.

"The review is prompted by the potential of improving credit metrics and a strengthening of the company's capital structure," wrote Moody's svp Neil Begley and managing director Alexandra Parker.

Moody's estimates Comcast's debt/earnings (before interest, tax, depreciation, amortization) ratio at 2.7X (Moody's likes to see that below 2.5X), and free cash flow/debt at 10%. 
Posted by Joseph N. DiStefano @ 3:27 PM  Permalink | Post a comment
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About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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