Paramount Global’s Credit Rating Plummets to Junk Status, S&P Global Declares

Paramount Global’s Credit Rating Plummets to Junk Status, S&P Global Declares.

Paramount Global’s debt rating was cut to junk status by credit-rating agency S&P Global.
The agency cited ongoing challenges with free cash flow generation and high debt.
The downgraded rating is due to struggles in the linear TV business and investments in streaming services. Paramount Global’s long-term debt was $14.6 billion.

After the downgrade, private-equity firm Apollo Global Management bid $11 billion for Paramount Pictures.
The junk status makes it easier for potential buyers to acquire Paramount’s assets without dealing with debt.
Paramount’s chair, Shari Redstone, may prefer a deal with Skydance Media to merge with Paramount Global.

S&P issued a stable outlook for Paramount Global, expecting leverage to decline and streaming losses to improve by 2024.
Previously, S&P had a “BBB-” rating for Paramount Global; now it’s “BB+”, a speculative-grade.
S&P also adjusted ratings for Paramount Global’s subordinated debt and lowered its short-term rating.