Fitch may cut Wind Acquisition notes

Fitch Ratings said it placed Wind Acquisition Finance SA's senior notes, rated BB, on Rating Watch negative. Fitch also said it affirmed its long-term issuer default rating at BB- and short-term issuer default rating at B, along with the instrument ratings of its senior bank facility and the second-lien notes issued by Wind Finance SL SA at BB+.

The outlook was revised to stable from positive.

The Rating Watch reflects news that Wind Telecomunicazioni spa's is seeking consent from its senior lenders, second-lien holders and bondholders to raise an additional €2.7 billion in notes which would rank equally with Wind Acquisition's existing senior notes. The additional fundraising is being initiated to refinance the PIK notes issued by Wind Acquisition Holdings Finance and to pay a €500 million dividend to shareholders.

The proposed issue would increase the leverage for this creditor class to 4.6x from 3.2x in the first quarter of 2009, Fitch said. The agency said this would materially weaken the estimated level of recoveries for the senior note creditors as the creditor class would have expanded and drives the Rating Watch negative.

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