Sky upgraded by Moody's

Moody's Investors Service has upgraded BSkyB's long-term debt rating outlook to the status of 'positive', up one notch from 'stable'. The service reaffirmed its current rating of Ba1.

In a statement, Moody's said that the change "reflects the group's strengthened competitive position in UK Pay-TV, its steadily growing DTH subscriber base and improving operational performance."

Moody's praised Sky's growth strategy of "growing and maximising the profitability of its subscriber base," rather than persuing growth by acquisition - a strategy more commonly attributed to Britain's two biggest cable operators, ntl and Telewest - both of which went on a buying spree in the nineties and have had to go through debt-for-equity restructuring arrangements with their respective bondholders. Telewest's restructuring is still in progress.

Most notably of all, Moody's said that Sky's target of achieving seven million subscribers by the end of 2003 "looks achievable", although the service notes that post-restructured cable operators might present re-emerging "competitive challenges" in the medium term.

On February 4, Standard & Poors also upgraded Sky's rating outlook to positive status. S&P's current rating for Sky is BB+.

Shares in BSkyB closed up 8p at 611p on Monday.