Fitch: WIND outlook negative

Fitch Ratings said it affirmed WIND Telecomunicazioni Spa's long-term issuer default rating at BB and its senior credit facilities at BB+, and revised the outlook to negative from stable on concerns over a rise in leverage on the back of a recent spectrum acquisition and the company's ability to withstand economic headwinds.

"WIND's spectrum acquisition triggered a notable rise in leverage while any benefits from this purchase are likely to be medium-term at best," Nikolai Lukashevich, a senior director at Fitch, said in a statement.

"Coupled with a likely negative impact of any austerity measures in Italy, this investment significantly reduces headroom within the current rating level, it may significantly slow down deleveraging and reduce free cash flow generation."

WIND's ratings benefit from potential support from its ultimate shareholder, Vimpelcom Ltd., whose credit profile remains notably stronger than WIND's, the agency noted.

WIND has a net debt-to-EBITDA ratio of 4.8x at the end of 2011 as a result of the spectrum investment and economic headwinds, the agency said.

WIND's credit profile is supported by its established position of the third-largest and highest-growing mobile operator in Italy supported by its expanding alternative fixed-line/broadband business, the agency said.

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