New York, September 22, 2016 -- Moody's Investors Service said on September 21, 2016, Viacom Inc. (Baa3, Stable) announced a 50% cut to its dividend, from $1.60 per share (annually) to $0.80. The move is in connection with substantial changes in the governance of the company and a shift to more conservative financial policies to manage the company's weak operating performance. NAI Entertainment Holdings LLC (NAI), a wholly-owned subsidiary of National Amusements Inc. and the parent company of Viacom, currently owns approximately 14 million shares of Viacom stock, of which about 55% are pledged as collateral against NAI's outstanding notes. As a result of Viacom's decision to cut its dividend, NAI Entertainment Holdings LLC (NAI) will lose 50% of its annual Viacom dividend income or approximately $11.5 million. The loss of income is credit negative, reducing free cash flow to an amount approaching zero. In addition, although we estimate the company will remain in compliance with its covenants, including a fixed charge ratio and leverage which incorporate dividend income, the cushion under these tests will fall significantly.

Vollständigen Artikel bei Moodys lesen