Moody's ups SBS Broadcasting ratings

Moody's Investors Service said it upgraded the ratings of SBS Broadcasting SA, including the senior implied rating to Ba3 from B2 and the €135 million senior unsecured notes due 2008 to B1 from B2.

The outlook is positive.

Moody's said the upgrade reflects the solid improvements in the company's financial performance over the past year and the substantial improvement in the company's leverage position resulting from the completed sale of the company's 30.4% equity stake in Polish TV broadcaster TVN SP. zo.o (B2 senior implied rating) for about €131.5 million in cash.

Moody's said the ratings continue to positively reflect SBS' large and geographically diverse asset base; the company's strong market positions in the Benelux and Scandinavian broadcasting markets; and the inherently high barriers to entry that characterize the company's markets.

The ratings continue to be constrained, however, by ongoing acquisition-related event risk; the highly competitive environments in which the company operates; the challenges associated with managing a number of stations spread across a number of different countries; the company's dependence on the European advertising market; sizeable minority shareholders for some of the company's stations; and structural considerations relating to the company's consolidated capital structure.

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