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S&P Boosts Time Warner's Credit Rating

November 19, 1998| From Associated Press

NEW YORK — Standard & Poor's has raised Time Warner Inc.'s credit rating to solid investment-grade status, citing its improved profit and debt-reduction efforts.

The leading Wall Street rating agency on Wednesday noted Time Warner's increased profit from its publishing, TV production and cable businesses, as well as controlled capital spending and asset sales that have helped trimmed debt.

S&P raised Time Warner's rating to BBB after several years at BBB-minus, the weakest investment-grade rating that ranks just above "junk" status. A higher credit rating allows a company to lower its borrowing costs.

The company has been stressing its efforts to gain solid investment-grade status after incurring a mountain of debt in the 1990 merger of Time Inc. and Warner Communications Inc., as well as the 1996 purchase of Turner Broadcasting System.

Time Warner's debt peaked at $18 billion after the Turner deal and now stands at about $15 billion.

The company has steadily increased its earnings before taxes, interest and other nonoperating items, a profit measure known as cash flow that Wall Street views as a crucial measure of performance for big media companies such as Time Warner.

S&P noted that Time Warner currently has no major acquisition targets that would weaken its credit rating.

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