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Moody’s rates Ufinet loans B2
Moody's Investors Service said it assigned a B2 corporate family rating and a B2-PD probability of default rating to Pertento Sarl, a company that will be the 100% ultimate owner of Gas Natural Fenosa Telecomunicaciones (to be renamed "Ufinet"). The agency also assigned provisional B2 ratings to the €295 million term loan B due 2021 and €30 million revolving credit facility due 2020 to be issued at Livister Investment SLU. The outlook is stable.
The term loan B has been used by private equity firm Cinven, along with around €230 million of equity contribution, to acquire Ufinet from its current owner, Gas Natural Fenosa Finance BV, in a carve-out transaction estimated at a total of €525 million.
The agency said the B2 corporate family rating reflects the moderately high cash-EBITDA leverage, which is estimated at around 5.5 times at closing with little deleveraging in the near term; exposure to Central and Latin America, where the creation of a regulatory framework brings uncertainty to future market practices; the very high concentration in the revenue contribution of Ufinet's top 10 clients, which represented around 67% of 2013 revenues; the limited track record of the company as a standalone business and the risk the carve-out transaction could result in delays in achieving the business plan.
Moody’s said the B2 rating also reflects the significant visibility over cash revenues, the low capital expenditure requirement as network expansions are driven by client requirements and funded by irrevocable rights of use upfront payments in large part, the high profitability of the business relative to its sector peers and the strong fiber network of the company.
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