Moody’s moves MasMovil to Ba3

Moody's Ratings upgraded Lorca Holdco Ltd.’s (MasMovil Group) long-term corporate family rating to Ba3 from B2 and the probably of default rating to Ba3-PD from B2-PD on the heels of the merger between MasMovil and Orange Spain.

Concurrently, Moody's has upgraded to Ba3 from B1 the ratings on the backed senior secured bank credit facilities issued by Lorca Finco plc, upgraded to Ba3 from B1 the ratings on the backed senior secured notes issued by Lorca Telecom Bondco, SAU, and upgraded to B2 from Caa1 the rating on the €500 million backed senior unsecured notes of Kaixo Bondco Telecom, SAU.

While MasMovil's existing debt will remain in place, the new joint venture plans to raise €6.6 billion of debt to fund a €5.85 billion payment to be up-streamed to Orange (Baa1 positive) and MasMovil's shareholders.

The combined entity has agreed a financial policy that includes a reported leverage target of less than 3.5x to facilitate an initial public offer of the joint venture in the medium term.

The outlook on the ratings is positive.

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