S&P lifts Pakistan Mobile

Standard & Poor's said it raised the long-term corporate credit rating on Pakistan Mobile Communications Ltd. to CCC+ from SD and on Mobilink's $112.2 million senior unsecured notes due 2013 to CCC+ from D.

The outlook is developing.

The upgrade comes after S&P lowered the corporate credit rating to SD on May 12, following Mobilink's completed tender offer for $137.8 million of initial notes for $100.6 million in cash, which the agency viewed as a distressed exchange.

The rating on Mobilink reflects the company's high exposure to funding risks and economic uncertainty, weak cash flow protection measures and highly intense domestic industry competition, S&P said.

These risks are partly offset by strategic benefits from its parent, Orascom Telecom Holdings SAE (B/stable), and the company's leading but weakening market position in the country, the agency noted.

"In our view, Mobilink is significantly exposed to the weak macroeconomic environment, external liquidity position and security situation in Pakistan (CCC+/developing/C)," S&P analyst Yasmin Wirjawan said in a statement.

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