Fitch rates Wind notes BB

Fitch Ratings said it assigned an expected BB rating to Wind Acquisition Finance SA's proposed senior secured fixed and floating notes to be guaranteed by Wind Telecomunicazioni Spa.

The new instruments are structured as senior secured obligations of Wind and will rank on par with other senior secured obligations of the company, including its bank debt and 2018 senior secured notes, Fitch said.

The proceeds will be lent by Wind Acquisition to Wind Telecomunicazioni.

Fitch said it understands that in conjunction with this transaction, Wind is planning to pre-pay 2014 and 2015 maturities of its senior secured bank debt, the agency said.

As a result, the company's debt maturity will lengthen while the proportions of secured and unsecured debt in its capital structure will not change, Fitch said.

Wind is planning to place €500 million equivalent of new euro-denominated floating-rate senior secured notes due 2019 and new dollar-denominated fixed-rate senior secured notes due 2020.

The security package and covenants are the same as for the outstanding senior secured notes, the agency said.

Wind's net-debt-EBITDA-ratio is high, estimated at about 5x at the end of 2012, but Fitch said it believes the company will be unable to quickly de-lever to below this level.

The negative outlook reflects that it will be challenging for Wind to stabilize its operating and financial performance on the back of bleak macroeconomic prospects in Italy and even minor additional pressures can compromise deleveraging efforts, Fitch said.

The ratings continue to benefit from potential support from its sole ultimate shareholder, Vimpelcom Ltd., whose credit profile remains stronger than Wind's, the agency said.

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