Viacom Said to Rethink Resistance to $12 Billion Downgrade

Viacom Inc. is grappling with a stark choice: standing aside as the ratings drop on its $12 billion in debt -- or taking dramatic steps like cutting its dividend or selling off assets.

Executives are looking for signals from the company’s revamped board on whether to take measures to avoid a ratings downgrade, a person familiar with the matter said. Allowing a downgrade of its bonds, which are rated two notches above junk, would give Viacom flexibility to keep paying its current dividend, though its borrowing costs could be higher.