Standard & Poor΄s Ratings Services said on Monday that its ΄BB΄ long-term corporate credit rating on Hellenic Telecommunications (OTE) remains on CreditWatch, where it was placed, with negative implications, on Dec. 6, 2010. The ΄B΄ short-term rating was affirmed.
At the same time, Standard & Poor΄s assigned its ΄BB΄ issue rating to OTE΄s proposed senior unsecured notes and placed it on CreditWatch negative.
"The rating actions reflect our view that OTE΄s operating prospects have not meaningfully deteriorated since we lowered the rating on March 8, 2011, despite the downgrade of Greece a few days ago," said Standard & Poor΄s credit analyst Matthias Raab.
"At this point, the one-notch differential between the long-term rating on OTE and that on the Greek sovereign reflects our opinion that OTE currently carries a lower debt restructuring risk than the sovereign", he added.
This is owing to OTE’s high, but not excessive, financial leverage and the expectation that OTE will generate modest free cash flow over the next 24 months. In addition, S&P believes that OTE΄s proposed notes could help it maintain its currently "adequate" liquidity profile.
source: CAPITAL
