Moody's: Baidu unaffected by subsidiary issue

Moody's Investors Service said Baidu Inc.'s A3 issuer rating, senior unsecured ratings and positive outlook are unaffected by majority owned subsidiary iQIYI, Inc.'s announced $1.2 billion convertible bond issuance.

iQIYI will use the proceeds mainly to invest in its content offering and technologies, Moody's said, and for working capital and other general corporate purposes.

iQIYI's proposed convertible bond and ongoing investment need will not impact Baidu's solid financial profile, the agency said.

After fully consolidating the proposed convertible bond issued by iQIYI, which Moody's said it expects Baidu's adjusted debt-to-EBITDA to stay at lower than 2x at the end of 2019, compared with 1.9x at the end of 2018.

Moody's also said it expects Baidu to maintain a solid net cash position in the next two to three years.

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