Moody's upgrades Ono

Moody's Investors Service said it upgraded Ono Finance plc's corporate family rating to B1 from B3 and bonds to B3 from Caa2 following the acquisition of Auna Telecomunicaciones SAU in November and the recapitalization of the combined group.

The outlook is stable.

The upgrade reflects the increased scale of the combined group, the removal of the event risk previously factored in the rating, Ono's demonstrated track record in growing its revenue and EBITDA, Ono's proven business integration ability and the opportunity to increase the combined group's efficiency by increasing Auna's operating and capital expenditure efficiency, the agency said.

At the same time, Moody's said the B1 rating takes into account significant integration and business plan execution risks, the highly competitive environment of the Spanish market, the sizable capital expenditures and negative free cash flow generation of the combined group, a continued increase in debt and the group's high leverage over the medium term.

The stable outlook reflects Moody's expectations of the combined group's ability to maintain its growth momentum and de-leverage rapidly over the medium term.

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