Moody's rates Telemobil notes B3

Moody's Investors Service said it assigned Telemobil SA a B3 corporate family rating, a B2 probability-of-default rating and a provisional B3 rating to its $125 million senior secured notes due 2014.

The outlook is stable.

The corporate family rating reflects the growth potential of Romania's telecom market, the company's competitive advantage, its focus on the post-paid segment of the market, the company's positive free cash flow in 2006, its management's track record and some shareholder support, Moody's said.

The rating also considers the company's small size and scale relative to other European markets and peers and some technology risk, given that Telemobil is the only CDMA operator in Romania. The agency said other concerns are Romania's challenging competitive environment and the company's high initial leverage, with a ratio of pro forma total financial debt to EBITDA of 7.9 times for the past 12 months as of March.

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