Moody's: TIM Hellas affected

Following the announcement by Apax Partners and Texas Pacific Group, the majority shareholders of TIM Hellas Telecommunications SA, that an offer has been submitted to acquire Q-Telecom, a fourth wireless operator in Greece, Moody's Investors Service said it has considered the effect on the ratings assigned to various entities of the TIM Hellas' group.

Moody's said the event risk associated with the Q-Telecom acquisition, contemplated during the initial rating assignment, is already largely factored into the prospective B1 rating and the negative outlook.

But Moody's said that the agreed consideration of €350 million is higher than the originally publicly indicated range of €250 million to €270 million. At the same time Moody's said it expected that any contemplated mix of funding for the transaction will be in line with the original expectations embedded in the rating and will not lead to any material increase in the pro-forma leverage (excluding any anticipated synergies).

Moody's said it understands that the company is likely to use the flexibility embedded in the existing notes' terms and conditions to incur up to €200 million in debt for acquisitions subject to a 5.25x consolidated leverage ratio.

In the event that the remainder of the consideration is substantially funded through shareholder contributions, Moody's said it relies on the expectation that any such instruments will essentially mirror the deeply subordinated position of the instruments used in the funding of TIM Hellas acquisition and will not negatively affect the ring-fence provisions of the restricted group.

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