S&P rates Discovery notes BBB

Standard & Poor’s said it assigned a BBB rating to Discovery Communications LLC’s proposed euro-denominated senior unsecured notes.

Discovery’s parent company, Discovery Communications Inc., provides an unconditional guarantee for the notes, as it does for the company’s other public debt.

Discovery will use the issuance proceeds for general corporate purposes, which include repaying $850 million 3.7% senior unsecured notes due June 2015.

The BBB corporate credit rating and stable rating outlook on Discovery are unchanged.

Discovery’s business risk profile is considered satisfactory, S&P said.

The ratings also consider the company’s portfolio of key domestic and international cable networks, as well as its strong EBITDA margins compared with peers due to its focus on nonfiction content, the agency said.

These inputs result in lower programming costs and predictable revenue stream with about 50% of revenues coming from affiliate agreements with video-service providers, S&P said.

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