Viacom Preparing For CBS Sale? Media Giant Prepares $1 Billion Bond Offering

Media conglomerate Viacom is preparing to price a U.S. dollar bond as soon as this week, market sources told IFR on Monday.

Bank of America Merrill Lynch, Citigroup, and Morgan Stanley are arranging investor calls for the bond on Tuesday and Wednesday, according to an email sent to an investor and seen by IFR.

The deal comes amid reports that the company is preparing itself to be sold to CBS following an announcement that interim CEO Tom Dooley would leave in mid-November.

Moody's downgraded Viacom's long-term debt ratings on Thursday to Baa3 from Baa2, citing a weaker than expected rebound in operating performance and high leverage.

"Viacom's leverage has risen well above the 3.25x sustained leverage threshold for the Baa2 rating, leaving no room for additional debt or operational setbacks under the company's ratings," it said.

Viacom said it plans to raise debt to fund near-term maturities, the rating agency said.

While this deal and dividend reduction helps the company's financial flexibility, it won't be sufficient to cut leverage levels that are in line with other Baa2 credits, Moody's said.