) has decided to issue $550 million debt in the form of $300
million senior notes and $250 million senior debentures,
scheduled to mature in 2023 and 2043, respectively. The issued
debts carry a respective interest rate of 3.250% and 4.875%. The
debt issuance is expected to be closed by Mar 14, 2013.
Viacom expects to generate net proceeds of $546 million from
the debt issuance, which will be utilized for fund general
expenses, shares repurchase or repayment of debts.
Both S&P and Fitch ratings agency provided BBB+ ratings to
Viacom's proposed debt offerings, which comes under investment
In the recently concluded quarter, Viacom had $671 million in
cash & cash equivalent and $8,371 million in outstanding debt
on its balance sheet compared with cash and cash equivalent of
$848 million and outstanding debt of $8,131 at the end of fourth
quarter of fiscal 2011. Debt-to-capitalization ratio at the end
of the reported quarter was 0.54 compared with 0.52 at the end of
During the first quarter of 2013, Viacom bought 13.3 million
common shares for $700 million with $3.85 billion still left to
be purchased under share repurchase program of $10 billion.
Moreover, $1.2 billion senior notes to get matured in the next
two years time. So a further issue of $550 million debts coupled
with its share repurchase plan and annual interest payment of
nearly $461 million will put pressure on the company's cash flow
in the next two years period.
Currently, Viacom has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Certain other companies belonging to the same media sector are
), which has a Zacks Rank #2 (Buy) while other two
Time Warner Inc.
) have a Zacks Rank #3 (Hold).
CBS CORP (CBS): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis
TIME WARNER INC (TWX): Free Stock Analysis
VIACOM INC-B (VIAB): Free Stock Analysis
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