Moody’s might upgrade Sunrise

Moody's Investors Service said it placed Sunrise Communications Holdings SA’s B1 corporate family rating and B1-PD probability-of-default rating on review for upgrade following the announcement that Sunrise's newly incorporated holding company, Sunrise Communications Group AG, has launched an initial public offering of its shares on the SIX Swiss Exchange.

The ratings on the existing debt instruments issued by Sunrise and its related entities are unaffected by the review. The agency said the existing debt instruments are expected to be repaid as part of a recapitalization of the firm under which new equity and debt instruments will be issued.

The agency said it put the ratings on review for upgrade because the proposed recapitalization will bring in new equity that will lower the company's financial leverage. Moody’s expects the company's net reported ratio of debt to EBITDA to decline to around 2.7 times on a pro forma basis from 3.7 times in September 2014. The lower leverage will likely result in any new debt issued as part of the refinancing being rated higher than the existing debt instruments being repaid, the agency said.

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