Discovery and Comcast Bonds Underperform Post-AT&T Media Spinoff
(Bloomberg) -- 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.
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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