Fitch downgrades Telefonica

Fitch Ratings said it downgraded Telefonica SA's and its subsidiary O2's long-term issuer default ratings to BBB+ from A- and the senior unsecured rating of the bonds issued by Telefonica Europe BV to BBB+ and Telefonica Finance USA LLC's preference shares to BB+.

The agency has affirmed Telefonica's short-term IDR s at F2.

The outlooks on the IDRs are stable.

"The combination of the €7.5 billion cash price paid for Vivo, the impact of economic conditions and the public targets set for dividends per share, suggest that Telefonica's leverage will remain elevated for some time," Fitch said in s statement.

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