Fitch may upgrade 21st Century Fox

Fitch Ratings said it revised the BBB+ long-term issuer default ratings assigned to Twenty-First Century Fox, Inc. and its wholly owned subsidiary, 21st Century Fox America, Inc., to Rating Watch positive from Rating Watch negative.

The watch revision was precipitated by the ongoing exchange offers and consent solicitations by the Walt Disney Co. for any and all outstanding the companies for up to $18.1 billion of new notes to be issued by New Disney, a newly formed wholly owned subsidiary of Disney, Fitch explained.

The watch will be resolved upon completion of Disney's acquisition of certain 21st Century Fox assets, the agency said, at which time the ratings will be equalized with Disney's ratings.

Prior to the transaction's close, which is expected during the first half of 2019, FOX will separate its news and broadcast businesses and certain sports networks and equity interests into a newly listed company to be spun off to existing shareholders, the agency explained.

Disney will then acquire the remaining assets of Twenty-First Century Fox, including cash in an amount to be determined prior to closing, Fitch said.

The new company will be comprised of Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox Sports, Fox Television Stations Group (28 stations) and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network, along with certain other assets and liabilities, the agency said.

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