Moody's upgrades Globo

Moody's Investors Service said it upgraded Globo Comunicacao e Participacoes SA's issuer rating to Baa1 from Baa2 and its $200 million 5.307% senior global notes due 2022, $300 million 4 7/8% global notes due 2022 and $325 million 9 3/8% perpetual notes to Baa1 from Baa2. The outlook is stable.

The agency said the upgrade was prompted by the demonstrated progress in the company's diversification away from advertising revenues into the content and programming segment. Other credit characteristic supporting the upgrade include continued strong free cash flow generation and very strong credit metrics relative to its similarly rated peers.

Globo's Baa1 ratings are supported by its leading market position in the Brazilian TV broadcasting market, excellent liquidity, comfortable debt amortization profile, solid leverage and coverage ratios, resilience during the past economic crisis and improvements in the company's disclosure of financial statements as well as the good TV advertising and programming growth prospects for the upcoming years due to major sporting events that will be held in Brazil, the World Cup Soccer in 2014 and the Olympic Games in 2016, Moody's said.

In the agency's view, the main factors constraining Globo's ratings are its concentration of revenues in the cyclical Brazilian TV advertising market, its high fixed cost base, competition that pressures its margins and the company's lack of independent board members, audit committee and set dividend policy.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.