Moody's rates Net Servicos notes Ba1

Moody's Investors Service said it affirmed Net Serviços de Comunicação SA's corporate family rating at Ba1 and assigned a Ba1 rating to the company's $300 million proposed notes issuance due 2020.

Proceeds will be used for possible acquisitions, debt reduction and general corporate purposes.

"The affirmation of Net's existing rating is based on an expectation that Net's leverage, as measured by total debt/EBITDA will not exceed 2.5 times and that the new notes will be hedged, with a full swap of all USD coupon and principal payments to domestic currency," Moody's vice president Soummo Mukherjee said in a statement.

Moody's said acquisitions would result in an increase of Net's total debt-to-EBITDA ratio to 2.2 times from 1.7 times as of June 30.

Net's Ba1 rating reflects its strong competitive position and continued good growth prospects, the agency said, as well as its ability to consistently generate positive cash flow from operations, its strategic importance for Telmex International, low leverage, improving interest coverage and comfortable liquidity position, the agency said.

The rating is constrained by the company's foreign-exchange exposure, likely increased competitive pressures from wire line incumbents and new entrants, and by the company's relatively low margins and free cash flow, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.