Moody’s may upgrade DreamWorks

Moody’s Investors Service said it placed DreamWorks Animation SKG, Inc.’s Ba3 corporate family rating, Ba3-PD probability of default rating and the B1 senior unsecured debt rating on review for upgrade following news that NBCUniversal, a division of Comcast Corp., will acquire DreamWorks in an all cash transaction valued at $4.1 billion.

DreamWorks’ stockholders will receive $41 in cash per share and the transaction is expected to close by the end of 2016, the agency said.

Moody’s also said that the transaction is not expected to impact Comcast’s A3 senior unsecured long term debt rating, prime-2 commercial-paper rating or its stable outlook.

The outlook on DreamWorks also was revised to stable to “under review” and the outlook on Comcast remains stable, the agency said.

The review on DreamWorks will focus on the various benefits on the acquisition, including potential cost savings and revenue synergies from larger scale and greater financial flexibility, Moody’s said.

The review also will consider the potential for lower leverage and particularly the likelihood that Comcast will replicate its past strategy of putting guarantees in place between it and the acquired debt issuers to simplify the legal credit structure into a single lower leveraged credit, the agency added.

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