S&P downgrades OTE, debt to BB-

Standard & Poor's said it lowered its long-term corporate credit rating on Hellenic Telecommunications Organization SA (OTE) to BB- from BB and placed the rating on CreditWatch with negative implications.

At the same time, the agency affirmed OTE’s B short-term corporate credit rating.

S&P also lowered its issue ratings on the debt issued by OTE's wholly owned financing vehicle, OTE plc, to BB- from BB and placed these ratings on CreditWatch negative.

The action follows the agency’s downgrade of the long-term sovereign ratings on Greece by one notch to B- from B. It caps the long-term corporate credit rating on OTE at three notches above the sovereign rating to reflect OTE's significant country risk exposure to the Greek economy.

OTE generates about 70% of its revenues and about 75% of its EBITDA in Greece, S&P said. OTE is also subject to pricing restrictions imposed by the Greek regulator and generates moderate revenues from the Greek government.

The agency would lower the cap on the rating on OTE to B if it assessed the likelihood that Greece might exit the eurozone increases to one-in-three or greater.

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