Investment rating boost for BSkyB

BRITISH Sky Broadcasting Group Plc, the British pay-television firm controlled by Rupert Murdoch, had its credit rating raised to investment grade by Standard & Poor after it boosted profit and cut debt.

BSkyB’s long-term credit rating was changed to BBB-, the lowest investment grade level, from BB+, S&P said.

“BSkyB’s solid operating performance, profitability, and cash generation have led to consistent reductions in its debt burden,” S&P’s credit analyst Trevor Pritchard said.

“We consider these improvements to be sustainable, taking into account the near-term prospect for a possible reinstatement of the group’s equity dividend,” he said.

The company, based near London, last month reported its sixth straight quarterly profit as it gained subscribers. Net debt at BSkyB, where Murdoch’s son James became chief executive last month, fell to €1.5 billion as of September 30, compared with €1.6bn three months earlier.

Rupert Murdoch, who chairs the company, last month told investors BSkyB may pay a dividend next year if BSkyB’s profit and cash flow targets are met. He didn’t specify what the targets were. BSkyB hasn’t paid a dividend since 1998.

BSkyB lost its investment- grade status after racking up €3.4 bn of losses in the four years to June, 2002.