Discovery and Comcast Bonds Underperform Post-AT&T Media Spinoff

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Discovery Inc. and Comcast Corp. bonds were among the biggest underperformers in the U.S. high-grade index Monday after AT&T Inc. agreed to merge its media assets with Discovery to form a new entertainment company.

The spread over Treasuries on Discovery’s 5.2% bonds due in 2047 widened 5 basis points to 182 basis points, while Comcast’s 2.45% bonds due 2052 widened 4 basis points to 83 basis points, according to Trace bond trading data. Both securities were among the bottom ten performers in the investment-grade index Monday morning.

AT&T is joining Verizon Communications Inc., which earlier this month sold its media division, in dropping its media assets. Cash proceeds from the spinoff may be used to pay down AT&T’s mountainous debt pile, and investors took notice, sending the telecom giant’s bonds surging.

Discovery and Comcast Bonds Underperform Post-AT&T Media Spinoff

The spotlight could now turn to Comcast, which will be left as the sole industry giant owning TV, internet and entertainment under one roof.

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