Moody’s: Tencent unchanged on acquisition

Moody's Investors Service said that Tencent Holdings Ltd.’s (A2 stable) announcement that it will jointly acquire 84.3% of Supercell (unrated) with a consortium at a total cost of roughly $8.6 billion does not immediately impact Tencent's A2 issuer and senior unsecured ratings, or stable outlook.

"Tencent has sufficient cash to fund its share of the proposed transaction, and the acquisition will thus not materially change the company's credit profile or affect its ratings," Moody's vice president and senior credit officer Lina Choi said in a news release.

"While the capital outlay and non-consolidation accounting treatment will temporarily raise Tencent's adjusted debt/EBITDA beyond our rating trigger levels, we expect strong growth in the company's cash flow in the coming 12 months will bring its leverage back to levels appropriate for the A2 ratings."

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