The debt rating service says that bond holders have no need to fear the fallout from a parliamentary report yesterday that says Rupert Murdoch?s handling of the UK hacking scandal made him ?not a fit person to exercise the stewardship of a major international company.? The media and entertainment giant’s “significant cash balance and strong free cash flow generation mitigates�the uncertainty of additional financial fallout from the phone hacking�scandal,” Moody’s Investors Service concluded today. News Corp has a strong Baa1 senior unsecured�rating; it generates about $2.5B a year in cash and had $9.4B in its coffers at the end of 2011, equal to more than 60% of its $15.5B in debt.�Moody’s says that after “cutting through the�highly politicized hyperbole” it concluded that News Corp can “mitigate potential costs” from the scandal. The report� from the�Culture, Media and Sport Committee “represents an opinion without any direct regulatory�implications.” Of course it “could have a bearing” on communications regulatory agency Ofcom’s feeling about whether to make Murdoch divest some or all of his 39% stake in BSkyB. But that’s not a big deal: “BSkyB is not consolidated into News Corp’s financials” so a sale “would not impact the company’s financial metrics.” Indeed, if Murdoch had to sell, then his company would “receive significant�after-tax cash proceeds from the sale” — especially if News Corp could relinquish its BSkyB board seats to buy time and avoid a ... Read More »
Wednesday, May 2, 2012
Moody?s: News Corp Debt Unaffected By ?Politicized Hyperbole? About Murdoch
The debt rating service says that bond holders have no need to fear the fallout from a parliamentary report yesterday that says Rupert Murdoch?s handling of the UK hacking scandal made him ?not a fit person to exercise the stewardship of a major international company.? The media and entertainment giant’s “significant cash balance and strong free cash flow generation mitigates�the uncertainty of additional financial fallout from the phone hacking�scandal,” Moody’s Investors Service concluded today. News Corp has a strong Baa1 senior unsecured�rating; it generates about $2.5B a year in cash and had $9.4B in its coffers at the end of 2011, equal to more than 60% of its $15.5B in debt.�Moody’s says that after “cutting through the�highly politicized hyperbole” it concluded that News Corp can “mitigate potential costs” from the scandal. The report� from the�Culture, Media and Sport Committee “represents an opinion without any direct regulatory�implications.” Of course it “could have a bearing” on communications regulatory agency Ofcom’s feeling about whether to make Murdoch divest some or all of his 39% stake in BSkyB. But that’s not a big deal: “BSkyB is not consolidated into News Corp’s financials” so a sale “would not impact the company’s financial metrics.” Indeed, if Murdoch had to sell, then his company would “receive significant�after-tax cash proceeds from the sale” — especially if News Corp could relinquish its BSkyB board seats to buy time and avoid a ... Read More »
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