Moody’s rates Silknet notes B1

Moody’s Investors Service said it gave a B1 rating to Silknet JSC’s planned $300 million of senior unsecured notes due 2027. Concurrently, the agency affirmed the B1 ratings on the company and its $200 million of senior unsecured notes due 2024 and changed the outlook to stable from negative.

The net proceeds will be about $250 million after the deduction of the issuer acquiring substantially immediately $50 million of the new notes and estimated costs and expenses. These net proceeds will be used by the issuer to repay the $200 million of senior unsecured notes due April 2024 as soon as possible or by the optional redemption date occurring in April 2022, to pay any premium and fees payable in connection with the tender offer for the senior unsecured notes due 2024, to repay the senior unsecured notes due 2022, and to use the remainder for general corporate purposes.

"The change of outlook to stable reflects (1) the improved operating performance of Silknet from Q2 2021 driven among others by the lifting of lockdowns imposed following the outbreak of the coronavirus pandemic and the recovery of Georgia's (Ba2 stable) economy, (2) the expectation of continued growth in revenue and EBITDA at above mid-single digit rates over the next two years driven by positive underlying growth in demand as well as more favorable regulatory environment supporting the de-leveraging of the company, (3) the improved maturity profile of Silknet pro forma for the refinancing, and (4) the adequate liquidity position of the company pro forma for the refinancing supported by a large cash balance mitigating the termination of the existing $20 million revolving credit facility," said Sebastien Cieniewski, Moody's lead analyst for Silknet, in a press release.

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