Fitch affirms Viacom

Fitch Ratings said it affirmed the BBB+ issuer default rating, BBB+ senior notes and bank facility due 2013, and F2 short-term issuer default rating of Viacom, Inc.

The outlook is stable.

The rating reflect Viacom's strong free cash flow generation, the expectation that Viacom will maintain the financial policies displayed over the past 12 months and that the company will remain solidly within the 2.25 times total leverage threshold, the strength in the company's media networks segment and the emergence of over-the-top, or Internet-based, television content that has increased the risk customers will turn to such alternatives in lieu of traditional pay-TV subscriptions, the agency said.

The ratings consider Viacom's strong cash generating ability, overall global prominence of its brands, leading positions in numerous attractive demographics and solid carriage positions with the multiple service operators, Fitch said.

The ratings are constrained by Viacom's exposure to cyclical advertising, an increasingly fragmented landscape for some of the company's key targeted demographics, secular challenges related to audience fragmentation and time-shifting and the inherent volatility of the movie business, the agency added.

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