Fitch Rates Comcast's $1.5 Billion Senior Unsecured Notes 'BBB'

Business Wire, March 13, 2003

Business Editors

NEW YORK--(BUSINESS WIRE)--March 13, 2003

Fitch Ratings has assigned a 'BBB' rating to Comcast Corp's debt offering consisting of $750 million 5.5% senior unsecured notes due 2011 and $750 million 7.05% senior unsecured notes due 2033. Proceeds from the offering will be used to refinance existing bank debt. The Rating Outlook is Stable.

Fitch rates the senior unsecured debt obligations of Comcast Corp., the holding company for the newly merged entity, Comcast and AT&T Broadband, 'BBB'. Likewise, the senior unsecured obligations of the restricted group, which represents Comcast Cable Communications, AT&T Broadband LLC (f.k.a. TCI Communications), MediaOne Group, and Comcast MO of Delaware (f.k.a. Continental Cablevision) are also rated 'BBB'. The company recently announced the successful completion of its bondholder consent solicitation in which Comcast and the above mentioned cable subsidiaries will fully and unconditionally guarantee the notes of Continental Cablevision. In addition, the subordinated debt is rated 'BBB-' and the commercial paper rating is 'F2'.

The ratings incorporate the company's leading market positions, consistent operating performance, and economies of scale which should provide bargaining leverage to obtain lower programming rates as well as increased advertising demand due to Comcast's location in the top eight of 10 designated market areas (DMAs). Comcast has proven its ability to integrate systems and while the AT&T Broadband properties are clearly the largest acquisition to date, Fitch believes the company is ahead of schedule in its integration efforts.

Another important consideration is the execution of the company's deleveraging plans. It is anticipated that this debt reduction will be achieved through the monetization of Comcast's 27% interest in Time Warner Entertainment (TWE),(a partnership between AOL Time Warner (AOLTW) and AT&T Broadband) with estimated proceeds of $3.5 billion as well as proceeds from the pending sale of cable systems to Bresnan Communications and the sale of its Charter partnership interests. Furthermore, Comcast's remaining 21% stake in Time Warner Cable provides additional room for delevering. Successful execution of these plans should reduce debt to approximately $25-$26 billion resulting in leverage at year-end 2003 below 4.0 times (x) and interest coverage in excess of 3.0x which is more reflective of a solid BBB company. Despite the refinancing of the bank debt with the funds from this bond offering, Fitch still believes the proceeds from the above mentioned plans will be used to immediately repay debt either through additional reduction of bank debt or the redemption of callable public debt.

Primary rating concerns include the risks associated with the integration and performance of the AT&T Broadband properties, the timing associated with the IPO of the company's 21% interest in TWC and the ongoing competitive threat from direct broadcast satellite (DBS) providers. Further, the announcement that Liberty triggered the exit process as it relates to Comcast's and Liberty's interests in QVC could have ratings implications as Fitch's current rating does not reflect debt financed acquisitions. While Fitch believes Comcast is committed to maintaining its ratings at the current level, the transaction structure will be reviewed as it develops and the rating impact, if any, will be determined at that time.