Comsat Corp, Washington has taken a hit from Standard & Poor’s Corp, which lowered its ratings to single-A-minus from single-A for the satellite operator’s senior unsecured debt, and A2 from A1 for the commercial paper. About $435m of rated debt is affected. The downgrades reflect Comsat’s increased business risk profile associated with its expansion in the entertainment industry and the resulting weakened financial profile. The major business segment, International Telecommunications, represents about 80% of overall revenues, while the entertainment segment represents about 20% but the latter is expected to grow to about 25% by 1998. Absent considerable improvement or a significant reduction in the existing stake held in the entertainment business, a further downgrade could occur in the near term, Standard & Poor’s said.
