Moody’s revises Sky view to developing

Moody's Investors Service said it affirmed the Baa2 senior unsecured and provisional Baa2 senior unsecured medium-term note ratings for Sky plc and its rated subsidiary, and changed the outlook to developing from stable.

The outlook change follows the Dec. 15 announcement of a formal offer from Twenty-First Century Fox, Inc. (Baa1 stable at 21st Century Fox America, Inc.) for the 60.9% of Sky it does not yet own. Prior to consideration by Sky shareholders, the bid must meet certain pre-conditions. There is likely to be a lengthy regulatory review process, potentially taking up to a year to conclude.

At this point in time, the agency said it does not have visibility as to possible changes to the post-acquisition capital structure of Sky.

"Fox has stated that it will part-finance its proposed acquisition of Sky with close to £2 billion of cash on Sky's balance sheet. We consider this to be a potential risk to the current Baa2 rating but believe that Fox is likely to mitigate this risk through structural enhancements to the existing Sky notes, as would be consistent with its financial policy over many years," Colin Vittery, Moody's vice president, senior analyst and lead analyst for Sky, said in a news release.

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