Fitch cuts Warner Media

Fitch Ratings said it downgraded Warner Media, LLC's long-term issuer default rating to BBB- from BBB+ and senior unsecured issue rating to BB+ from BBB+.

These actions follow the recent completion of the merger of AT&T's WarnerMedia assets with Discovery Inc., Fitch said. Discovery changed its name to Warner Bros. Discovery, Inc. at closing as expected.

“The downgrade recognizes the increase in WBD's Fitch-calculated leverage driven by the merger's debt financing, although Fitch expects leverage to decline below its negative sensitivities of 4.0x in 2023. The issue rating notching is driven by the fact that Warner Media, LLC's $1.5 billion of legacy debt is structurally subordinated to all other WBD debt and is not guaranteed by WBD or its subsidiaries,” the agency said in a press release.

The outlook is stable.

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