Moody’s upgrades Vivacom

Moody's Investors Service said it upgraded Bulgarian Telecommunications Co. EAD's (Vivacom) corporate family rating to Ba3 from B1 and affirmed its probability of default rating at B1-PD.

The outlook is stable.

"The upgrade of Vivacom's ratings reflects the company's successful completion of a refinancing package which will be used to repay in full by April 2018 the company's outstanding €400 million notes due November 2018. It also reflects the company's consistent track record of steady deleveraging since 2013, our expectation of a continued improvement in key credit metrics, and the company's conservative financial policies," Alejandro Nunez, Moody's vice president, senior analyst and lead analyst for Vivacom, said in a news release.

As part of the recent refinancing exercise, the agency said it expects the company will primarily use its on-balance sheet cash to repay the balance of the outstanding notes' redemption not funded by its new bank credit facility, reducing its outstanding gross debt by about 113 million Bulgarian lev, to 675 million Bulgarian lev on a proforma basis.

The B1 rating on the existing €400 million 6 5/8% senior secured notes due November 2018 were unaffected, as they will shortly be redeemed with proceeds from the new bank facility. Moody's said it expects to withdraw the ratings on those existing notes once they are repaid.

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