Moody’s Investor Service today placed Dow Jones senior unsecured credit ratings under review for possible downgrade.
The review means that the ratings for Dow’s outstanding senior notes and credit facilities will be downgraded when the company is acquired by News Corp. On Tuesday, News Corp. secured enough voting shares to approve the sale of Dow Jones and the companies entered into a definitive agreement.
The rating agency expects to cut Dow’s senior unsecured credit rating, currently at Baa1, one notch to Baa2 once the deal clears shareholder and regulatory approvals and upon execution of the editorial agreement covering the Wall Street Journal.
Specifically, the ratings under review include those for the company’s outstanding senior notes due in February 2008 and totaling $225 million. The agency expects News Corp. will refinance the notes and any commercial paper outstanding at their maturity if they remain out after the closing the merger.
Dow has $585 million of credit facilities that are currently undrawn.
Moody's also affirmed Dow Jones' Prime-2 commercial paper rating.