Fitch cuts Wind, rates notes BB-

Fitch Ratings said it downgraded Wind Telecomunicazioni SpA's issuer default rating to B+ from BB- and assigned a stable outlook.

Wind's instrument ratings were also downgraded by one notch.

At the same time, the agency assigned expected BB-(EXP)/RR2(EXP) ratings to Wind's proposed €500 million floating-rate notes due 2020 and €3,565,000,000 equivalent senior secured notes due 2020. The notes are to be issued by Wind Acquisition Finance SA and guaranteed by Wind.

Fitch said the transaction will improve Wind's liquidity profile by extending its debt maturity profile and cash flows through lower interest payments. However, the significant amount of one-off costs related to the refinancing transactions combined with weak EBITDA performance mean that leverage is likely to trend above the agency’s net debt/EBITDA threshold of 5.5x by end-2014, with limited de-leveraging over the medium-term. This risk is reflected in the downgrade.

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