MOODY'S CONFIRMS RATINGS OF WESTINGHOUSE ELECTRIC CORPORATION AND SUBSIDIARIES (SENIOR UNSECURED AT Ba1)
New York, 11/13/1996 -- Moody's confirmed the debt ratings of Westinghouse Electric Corporation (Westinghouse), CBS Inc., and Infinity Broadcasting Corporation following the company's announcement today that it plans to spin off its Industrial and Technologies Group to shareholders in a transaction that is intended to be tax free. At the same time, the company announced that the broadcasting operations, which would comprise the proposed new Westinghouse, will retain all existing debt, including the assumption of Infinity Broadcasting's debt. As proposed, the industrial businesses would have no publicly rated debt. While the new Westinghouse would be fully leveraged for its rating category at the outset of the proposed spin-off, the rating reflects Moody's expectation that management will focus on reducing debt over the near term with excess cash flows. The rating also incorporates the scale and strength of the company's profitable broadcasting operations, offset by the need to invest to strengthen the CBS network and to further expand its media activities. Subject to all regulatory and shareholder approvals, the stock acquisition of Infinity Broadcasting should be consummated near year end 1996 and the proposed spin-off should occur in late 1997.
Ratings confirmed include the following: Westinghouse Electric Corporation:
Ba1 rating for senior unsecured debt
Ba1 rating for senior unsecured revolving bank debt
(P) Ba1 rating for senior unsecured shelf registration
"ba3" Series C preferred stock rating
Not Prime short-term debt rating for commercial paper CBS Incorporated:
Ba1 rating for senior unsecured debt
Not Prime short-term debt rating for commercial paper Infinity Broadcasting Corporation:
Ba3 rating for senior subordinated debt
Moody's said that the proposed spin-off represents an initial step in fully disengaging its media operations from the industrial businesses, including the company's pension underfunding and environmental liabilities, which are intended to be the direct responsibility of the spun-off industrial businesses. Moody's went on to say that the current debt ratings are prospective and anticipate, (1) meaningful debt repayment over the near to intermediate term and (2) only moderate broadcasting cash flow exposure to contingencies related to pension underfunding and environmental liabilities. Over the intermediate term, Westinghouse's ratings could be viewed more positively to the extent that there is a smooth transition in the separation of the businesses which would allow for a more rapid reduction in debt and contingent liabilities than presently contemplated. Westinghouse Electric Corporation, headquartered in Pittsburgh, Pennsylvania, is a globally diversified broadcasting, technology and industrial equipment company. Infinity Broadcasting Corporation, headquartered in New York, is primarily a radio broadcaster.
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