S&P ups Cell C, debt; rates notes B

S&P said it today raised its long-term corporate credit rating on Cell C (Pty) Ltd. to B from B-.

The outlook is stable.

At the same time, the agency upgraded its issue rating on the company's existing senior secured debt to B from B- and assigned a B issue rating to its proposed senior secured notes due 2021. The recovery rating on the existing and proposed debt is 3, reflecting an expectation of recovery in the lower half of the 50%-70% range, in the event of a payment default.

S&P removed the long-term corporate credit rating and issue rating on the existing senior secured debt from CreditWatch with developing implications, where they were placed on June 28.

S&P said the upgrade reflects Cell C's significant debt reduction, the material decrease in currency risk on the debt, the improved liquidity post-refinancing with no debt maturity in the near-term and the good operating performance. These factors are partly offset by the agency’s anticipation of negative free operating cash flow (FOCF) in coming years.

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