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Rating Action:

Moody's upgraded Comcast's senior unsecured ratings to A3 from Baa1 and placed NBCUniversal's Baa2 ratings on review for upgrade following Comcast's agreement to acquire GE's 49% stake in NBCUniversal; Comcast's rating outlook changed to positive

13 Feb 2013

New York, February 13, 2013 -- Moody's Investors Service upgraded Comcast Corporation's ('Comcast') senior unsecured debt ratings to A3 from Baa1 and placed NBCUniversal Media, LLC's ('NBCUniversal' -- Baa2 sr. unsecured) ratings on review for upgrade following Comcast's announced agreement to acquire the remaining 49% stake in NBCUniversal that it does not own from General Electric Company ('GE' -- Aa3 sr. unsecured). The announcement represents an acceleration from Comcast's original agreement with GE to acquire the rest of NBCUniversal in equal parts in 2014 and 2018. The upgrade of Comcast's ratings and review for upgrade of NBCUniversal's ratings reflects our expectation that the company will simplify the two separate capital structures by putting in place cross guarantees between debt at NBCUniversal and Comcast and its subsidiaries that have outstanding debt, thereby consolidating Comcast and NBCUniversal into a single legal credit with equal credit ratings. In addition, the upgrade of Comcast's ratings is also prompted by significant use of cash on hand for the financing (about two-thirds) relative to the use of debt, and a lower leverage target for the combined company. Assuming no material changes to the terms of the transaction (including the aforementioned cross guarantee structure), we expect the senior unsecured ratings of NBCUniversal to be upgraded to A3. Moody's also changed Comcast's rating outlook to positive from stable. The positive outlook reflects our expectation that the company will sustain its lower leverage target beyond 2014 and ratings could be upgraded in the next 18-24 months if adjusted debt-to-EBITDA leverage is sustained under 2.0x and management is committed to a maintaining a higher rating. The P-2 short term ratings of both Comcast and NBCUniversal remain unchanged.

RATINGS RATIONALE

The upgrade of Comcast's ratings and review for upgrade for NBCUniversal's ratings reflects the expected benefits of diversification for both companies, and an increase in scale, particularly for NBCUniversal. As a result, Comcast will now fall under Moody's large global diversified media industry rating methodology rather than the cable television industry methodology. "The upgrade also reflects our expectation of improved credit metrics for the consolidated entity over the next two years, including the company's lower target for consolidated debt-to-EBITDA leverage of between 1.7x-2.2x versus its current target of 2.2x to 2.7x, both which include Moody's adjustments which add about 0.2x to the company's reported leverage and stated leverage targets," stated Neil Begley, a Moody's Senior Vice President. Comcast's current standalone leverage is around 2.0x while NBCUniversal's current leverage is over 3.0x. "We believe that the company will temper share repurchase activity if necessary in order to reach these targets, and management has a strong track record of achieving its committed targets," added Begley.

The total purchase price is expected to be $18.1 billion, which consists of $16.7 billion for GE's 49% stake in NBCUniversal, a valuation which is broadly based on a predetermined formula agreed upon by both parties from the time Comcast acquired its initial 51% stake in NBCUniversal in 2011, and $1.4 billion for other assets to be acquired as a part of the transaction (primarily real estate). Comcast expects to fund the acquisition with a combination of cash on hand (about $11.4 billion), drawings under its commercial paper program or bank credit facility ($750 million), debt and preferred stock of a new holding company above NBCUniversal that will be issued to GE ($4 billion), borrowings under a new credit facility at the new holding company ($1.25 billion) which will replace the existing NBCUniversal bank facility, and preferred stock to GE ($725 million). Moody's anticipates that the debt at the new holding company will benefit from guarantees from Comcast and its cross guaranteed subsidiaries, but not from NBCUniversal. "Given that the majority of the cash flow is generated by Comcast, and Comcast and its subsidiaries are expected to benefit from NBCUniversal guarantees, the new holding company debt should be equal to the Comcast and NBCUniversal credit," stated Begley. However, as we expect that the holding company preferred stock will not benefit from any guarantees, and therefore is contractually subordinated as well as structurally subordinated to the holding company debt, it is likely to be rated three notches below the senior unsecured ratings.

The transaction is not subject to any shareholder approvals or financing, and is expected to close before the end of the first quarter in 2013. We anticipate concluding our review of NBCUniversal's ratings before the close of the transaction with the expectation that if the proposed transaction structure and terms (including cross guarantees between NBCUniversal and Comcast debt) remains unchanged, the review will be concluded with an upgrade of NBCUniversal's senior unsecured debt ratings to A3, equal to that of Comcast.

Comcast Corporation, with its headquarters in Philadelphia, Pennsylvania, is a leading provider of video, high-speed Internet and phone services to residential and commercial customers. The company also owns 51% of (soon to be 100%) and controls NBCUniversal Media, LLC, a diversified media company. Consolidated revenue for FY 2012 was $62.6 billion, with almost two-thirds derived from its cable system operations.

NBCUniversal Media, LLC, with its headquarters in New York, New York, is 51% owned by Comcast and 49% owned by General Electric Company (Aa3 senior unsecured rating), soon to be 100% owned by Comcast. As a diversified media company, NBCU is comprised of cable networks (including 15 cable channels and 11 regional sports and news networks), the NBC and Telemundo broadcast networks, 10 NBC affiliated and 15 Telemundo affiliated owned and operated local television stations, filmed entertainment and stage plays in various media formats (for theatrical, home entertainment, and television) and theme parks in Orlando and Hollywood. NBCU's revenue for FY 2012 was about $23.8 billion.

The principal methodology used in rating Comcast Corporation and NBCUniversal Media, LLC was the Large Global Diversified Media Industry Methodology published in December 2010. Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entities of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Neil Begley
Senior Vice President
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

John Diaz
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgraded Comcast's senior unsecured ratings to A3 from Baa1 and placed NBCUniversal's Baa2 ratings on review for upgrade following Comcast's agreement to acquire GE's 49% stake in NBCUniversal; Comcast's rating outlook changed to positive
No Related Data.
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