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S&P puts Hungarian Telephone and Cable on watch
Standard & Poor's said it placed its B+ long-term corporate credit rating on Hungarian Telephone and Cable Corp. on CreditWatch with negative implications following the announcement that the company will purchase 95.7% of Memorex Telex Communications AG for €90.5 million.
The company will fully fund the acquisition through a €100 million subordinated bridge loan facility, which will be pari passu with the existing subordinated bonds due 2012 and the senior unsecured notes due 2013. It will also roll over €26.2 million of debt obligations at Memorex.
S&P said the CreditWatch placement reflects its need to determine the effects of the acquisition on Hungarian Telephone and Cable's business and financial risk profile and to see whether the expected increase in debt resulting from this transaction is compatible with the current rating on the group.
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