Moody's rates Viacom bonds Baa2

Moody's Investors Service said it assigned a Baa2 rating to Viacom Inc.'s new bond issuance. The new notes are anticipated to be split between five-, 10- and 30-year maturities for a total in the range of between $1.4 billion and $1.5 billion. The outlook is stable.

Proceeds will be used for general corporate purposes, including repayment of $600 million of debt maturities due in 2014.

The agency said the Baa2 rating reflects Viacom's strong, narrowly focused demographic brands; its position as one of only a handful of major global film studios and distributors; and its scale, diversification and moderate exposure to cyclical advertising spending.

However, the rating also considers the challenges around investing in programming and innovation to remain relevant for television viewers, which impacted Viacom in recent years as it failed to sufficiently invest in its businesses, Moody's said.

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