Moody's Eyes Possible Upgrade of CBS Corp. Debt Rating

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The credit ratings agency cited a "sustained deleveraging of the company over the last 18 months" in announcing its review on about $6 billion of CBS debt, which could make borrowing cheaper for the company.

NEW YORK - Credit ratings agency Moody's Investors Service said Wednesday that it has placed  approximately $6 billion in CBS Corp. debt on review for a possible upgrade.

Higher debt ratings make borrowing cheaper. Moody's review is focused on senior unsecured long-term debt and so-called commercial paper, or short-term borrowing.

In a high-profile recent debt ratings move, Moody's competitor Standard & Poor's the other week downgraded the rating of U.S. debt, which triggered a stock market selloff.

"The review is prompted by the strong [operating cash flow] and free cash flow growth and sustained deleveraging of the company over the last 18 months," Moody's said about CBS Corp., led by CEO Leslie Moonves, in its update Wednesday. "The company's debt leverage has declined steadily" since year-end 2009.

Moody's had previously said that  it would consider a debt rating upgrade if the entertainment company repaid over $1.5 billion
in debt. "Since then, the
company has repaid close to half this amount and appears to have the capacity to reduce debt further to reach the milestone in the near-term through additional pension contributions and debt pay down," it said Wednesday.

Moody's also mentioned the risk of a double-dip recession. "Additionally, the review will consider the growth prospects of the company going into 2012 and beyond, including its potential to grow non-cyclical revenue sources, and its financial flexibility to weather another economic downturn," it said.


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