S&P puts Mouse in hole

Disney's ratings lowered

Standard & Poor’s lowered its ratings on Disney debt Monday, citing in part concerns about how the Sept. 11 terrorist attacks have affected conglom’s theme parks and other operations.

In taking the action — which followed a similar, earlier move by Moody’s Investors Service — S&P noted the Mouse House will swell its debt levels when it concludes the impending acquisition of cabler Fox Family. A recent Disney stock-buyback also added to debt.

“Economic weakness is likely to continue to exert pressure on Disney’s businesses,” S&P wrote in a report accompanying its ratings adjustments. “Ratings maintenance will rely on stabilization of earnings and managing cash flow to reduce debt.”

S&P lowered its ratings on Mouse’s corporate credit and senior unsecured debt to A-minus from A. Though all ratings remain investment grade, the various downgrades debt could lead to higher Mouse borrowing costs.

The action was announced after the close of market trading. Disney shares were off 46¢, or 2%, at $19.15 on Monday.

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