Sky credit rating downgraded following £7bn takeover of Sky Italia and Sky Deutschland
Sky’s long-term corporate credit rating has been cut following the completion of its £7bn takeover of Sky Italia and Sky Deutschland yesterday.
Standard & Poor’s downgraded Sky’s credit rating from ‘BBB+’ to ‘BBB’ as it estimated the group would raise a “significant amount of debt to part-find the acquisitions”.
The credit ratings agency expect Sky to post about £7.9bn of debt by the end of the financial year in June 2015.
The outlook for Sky is stable, said Standard & Poor’s, who expect the acquisitions to have a “modestly positive impact on BSkyB’s business risk profile”.
Yesterday British Sky Broadcasting Group PLC announced it had completed the acquisition of a 100 per cent stake in Sky Italia and an 89.71 per cent stake in Sky Deutschland.
Last week credits ratings agency Moody’s also downgraded BSkyB’s rating due to the debt accumulated in the takeover.
Moody’s shifted the company from 'Baa1' to 'Baa2', its second lowest investment grade.
The company has now dropped “British” and “Broadcasting” from its official name and changed its stock market ticker from BSY to SKY. The new company will be listed in London with chief executive of BSkyB Jeremy Darroch now overseeing operations across the Sky Deutschland and Italia arms.
The international business will serve 20m customers across the UK, Ireland, Italy, Germany and Austria, employing 31,000 staff.