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S&P upgrades BT Group, EE to BBB+
S&P said it raised its long-term corporate credit and issue ratings on BT Group plc and its fully owned subsidiary EE Ltd. to BBB+ from BBB.
The outlook on both entities is stable.
At the same time, the agency affirmed its A-2 short-term corporate credit rating on BT.
S&P also assigned BBB+/A-2 long- and short-term issuer ratings to EE's fully owned finance subsidiary EE Finance plc and withdrew the rating on BT's subsidiary ESAT Group Ltd., as the company no longer bears debt.
S&P said the actions reflect its view that BT's successful acquisition of EE Ltd. significantly strengthens its business risk profile. BT now has a significant competitive edge in the U.K. telecommunication market thanks to its fixed and mobile integration; the strong quality of its combined network; and the group's solid and sustainable commercial achievements in IPTV, fixed-broadband, and 4G data services, which are further enhanced by opportunities to market convergent services.
As such, the agency revised its assessment of its competitive position to strong from satisfactory, previously. This in turn should support consistently robust generation of cash flows after pension contributions and maintenance of credit metrics commensurate with the rating.
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