Moody's boosts Magyar

Moody's Investors Service said it assigned a provisional B1 (LGD4, 54%) rating to the proposed €340 million senior secured notes to be issued by Magyar telecom BV.

The agency said it upgraded Magyar Telecom's corporate family rating to B2 from B3, its floating-rate notes due 2013 to B3 (LGD6, 95%) from Caa1 (LGD4, 62%) and its probability-of-default rating to B1 from Caa3/LD, reflecting the company's improved liquidity and amortization schedule and its bond-only debt structure at closing.

The outlook was changed to stable.

The action concludes the review began on Aug. 12, which was prompted by concerns over Magyar Telecom's liquidity profile in light of limited cash flow generation after interest payments, rising debt amortiaation requirements and tight covenant structure.

Moody's said the action follows the company's plans to issue €340 million of senior secured notes with maturity 2016 and use the proceeds to repurchase the outstanding €131 million plus premium 2012 high-yield notes, to repay the €140 million senior facilities and €21 million subordinated loan from banks.

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