S&P keeps Valentia Telecom on negative watch

Standard & Poor's said it kept Valentia Telecommunications upc's BB+ corporate credit rating and BB- senior unsecured debt rating and eircom Funding upc's BB- subordinated debt rating on CreditWatch with negative implications, where they were placed on Feb. 22.

The rating action follows an announcement by Valentia's owner, eircom Group plc, that it received a joint proposal from Babcock & Brown Capital Ltd. and eircom ESOP Trustee Ltd., the trustee of eircom's employee share ownership trust, that could lead to an offer being made for the group.

The CreditWatch placement reflects S&P's expectation that Valentia's credit quality would be weakened by the potential takeover if the transaction is substantially debt financed and results in higher leverage for the group. Given the nature of the potential acquirer, the agency said it expects that a substantial portion of the acquisition price could be debt funded and pushed down to the operating company level, which might result in a multi-notch downgrade.

Valentia's lease-adjusted total debt was €2.8 billion at Dec. 31, and the group posted lease-adjusted net debt to nine-month annualized EBITDA of 3.9x.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.