S&P upgrades Magyar Telecom

S&P said it raised the long-term corporate credit rating on Magyar Telecom BV to B- from CCC+.

The outlook is stable.

The agency also said it raised the rating on Magyar Telecom's €150 million senior secured payment-in-kind toggle notes due 2018 to B- from CCC+.

The upgrades reflect Magyar Telecom's somewhat better-than-expected operating performance in the first nine months of 2016, S&P said, with stabilizing revenues and EBIDTA margins.

The upgrades also consider an expectation of modestly growing revenues and margins in 2017, supported by the group's investments in its fiber network, stronger macroeconomic conditions with rising employment and reduced depreciation of the Hungarian forint against the euro, the agency said.

Several governmental measures also are expected to support Magyar Telecom's operations, including a reduction of the corporate tax rate to 9% from 19% and a reduction of employer payroll charges and special taxes, S&P said.

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