Fitch reviews BSkyB

Fitch Ratings said it placed British Sky Broadcasting plc's long term issuer default rating and senior unsecured rating of BBB+ on Rating Watch Negative following the announcement of BSkyB's proposed acquisition of 100% of Sky Italia and a 57.4% stake in Sky Deutschland from Twenty-First Century Fox.

The most likely outcome of the watch will be a two-notch downgrade to BBB-, with its resolution subject to closing of the deal, which remains subject to regulatory clearance and shareholder approvals. Management's commitment to an investment grade rating and track record of delivering targeted metrics is an important factor.

Fitch said the potential exists for financial metrics that might appear challenging at the investment grade level, given the required offer to Sky Deutschland minorities. However, this is not the agency’s base case, while it believes mitigating action would be available and be taken by management in this event.

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