Fitch hikes Lorca

Fitch Ratings said it upgraded Lorca Holdco Ltd.'s long-term issuer default rating to BB from B+. The agency also raised Lorca's and its instrument entities' senior secured debt to BB+ from BB and Kaixo Bondco Telecom SAU's senior unsecured debt to BB from B-. The recovery rating for the senior secured debt remains at RR2 while the recovery rating for senior unsecured debt has been revised to RR4 from RR6.

“The upgrade follows the E.U. Commission's and the Spanish regulator's and government's approval of the merger between MasMovil (MM), owned by Lorca, and Orange Spain (ORA SP). The upgrade reflects a near-term completion of the merger, which results in a much stronger operating profile, an improved capital structure and a more conservative financial policy,” Fitch said in a press release.

ORA SP is the second-largest and MasMovil is the fourth-largest network operator in Spain. Together, they have a market share of about 40% in fixed broadband and mobile.

The outlook is positive.

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