06.08.2009 03:10 PM
CBS Credit Rating Cut
NEWS YORK: Standard & Poor’s cut CBS’s corporate credit rating from BBB to BBB- on Friday. The rating outlook is negative, and was downgraded in part on falling automotive revenues. A BBB- rating is S&P’s lowest investment grade. CBS had debt of more than $7 billion at the end of March.
“The ratings downgrade is based on our concern that the company’s efforts thus far to rein in leverage through cost and dividend reductions have been more than offset by revenue weakness,” said S&P analyst Heather Goodchild in a statement. “We believe that the extent and pace of a recovery, especially in local TV and radio, is highly uncertain, given structural shifts in end-market ad demand.”
Shares of CBS dropped from a close of around $8.77 on Friday to around $8.50 by Monday afternoon, though the wider market also registered a similar dip. -- Deborah D. McAdams