Rating agency Standard & Poor’s Corp. said Friday it assigned its BBB- rating to Time Warner $ 1 billion of 20-year note issue.
S&P said it expects a stable rating outlook for TW, reflecting the gradual improvement in interest and dividend coverage over the next one to two years, as well as temporary setbacks in interest coverage.
While these considerations were factored into S&P’s upgrade of all TW ratings last June, the agency noted, “Upgrade potential is limited until very substantial progress is made with the preferred refinancing and meaningful improvement is seen in the combined fixed charge coverages.”
The agency also said it affirms the A-3 rating on Time Warner Entertainment’s commercial paper, the BBB- rating on senior debt of TW and TW Entertainment, the BB+ rating on subordinated debt of Warner Communications and Lorimar Telepictures and the BB rating on TW’s preferred stock.
S&P said it expects consolidated TW’s earnings before interest, taxes, depreciation, and amortization coverage of interest charges is expected to weaken slightly from 3.13 times for the nine months ended Sept. 30, 1992.