Fitch: No change for Vivendi

Fitch Ratings said the cancellation of Vivendi SA's proposed €1 billion to €2 billion rights issue is not expected to impact its long-term issuer default rating and senior unsecured ratings of BBB. This follows news that Vivendi will not be making the previously announced issue.

Due to a negligible take up of the $27.50 share buyback offer at Activision Blizzard, a condition of the original merger agreement, Vivendi's cash outflow on the transaction will now be about $1.1 billion lower than initially expected at a Vivendi holding company level. This leaves a forecasted peak leverage at a similar level to that anticipated when the transactions were announced in December 2007, the agency said.

Fitch said its expectation remains that Vivendi's credit metrics will be at the higher end compatible with a BBB rating for a group with Vivendi's risk profile at the end of 2008, but the agency said it expects rapid de-leveraging through 2009 from operating cash flows and reduction dividends paid by a subsidiary.

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