New York, October 24, 2016 -- Moody's Investors Service, ("Moody's") has placed AT&T Inc.'s Baa1 senior unsecured rating on review for downgrade following its agreement to purchase Time Warner Inc. for $85.5 billion. AT&T's Prime-2 commercial paper rating has been affirmed, and, at this time, Moody's expects any potential downgrade of AT&T's senior unsecured rating to be limited to one notch. AT&T intends to finance the deal with a mix of 50% equity and 50% cash and Moody's estimates that AT&T's gross leverage will rise to around 3.5x (including Moody's standard adjustments, which add around 0.7x to reported leverage) at year end 2018, assuming the deal closes at year end 2017. Moody's estimates that AT&T and Time Warner could accumulate up to $10 billion in combined cash to offset the amount of potential new debt during the inevitably lengthy regulatory approval process.

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