Moody’s downgrades Warner Bros. Discovery unsecured debts on challenges

Moody’s last night downgraded the backed senior unsecured notes ratings of Discovery Communications and WarnerMedia Holdings to Ba1 from Baa3. Moody’s also placed the ratings on review for downgrade. The downgrade reflects Warner Bros. Discovery’s (WBD) “persistent operating challenges and a change in its financial policies to include secured debt in its capital structure pre and post separation,” Moody’s said. “Given the revenue and profitability pressures caused by the declining linear television business, uncertainty as to the timing of future deleveraging and the financial policy change, we viewed the credit profile as inconsistent with an investment grade rating,” it added.