Fitch affirms Discovery's BBB- rating

Fitch affirmed Discovery Communications LLC's long-term issuer default rating at BBB- and short-term issuer default rating at F3. These actions follow the announcement that AT&T will merge Discovery with its WarnerMedia assets.

The rating outlook is stable.

Fitch views the merger positively as it creates the world's second largest media company and significantly increases the company's scale.

Management restated their commitment to maintaining their investment grade rating after the merger and Fitch expects the company to use free cash flow to prepay debt until total leverage reaches the company's lowered target leverage range of 2.5x to 3x, down from 3x to 3.5x. Fitch expects pro forma total unadjusted gross leverage will be just under 5x at closing and decline below Fitch's 4x negative rating trigger within 18 months and reach the low 3x by 2024.

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