Moody's: Globe Telecom outlook now negative

Moody's Investors Service said it affirmed Globe Telecom Inc.'s senior implied and senior unsecured ratings at Ba2 but changed the outlook to negative from positive.

The outlook change reflects Moody's decision to downgrade the Philippine government's long-term foreign currency bond rating to Ba2 with a negative outlook. Globe's foreign currency senior implied and senior unsecured ratings and outlook are therefore constrained.

Moody's said that the ratings of Globe Telecom reflect the growth evident in the Philippine cellular industry and from which Globe - as one of the two leading operators - will clearly stand to benefit. Furthermore, the ratings reflect the fact that the company continues to demonstrate a healthy financial profile and free cash flow-generating ability, as well as Moody's expectation that both conditions will prove sustainable.

The ratings also reflect the risks associated with Globe's exposure to an inherently volatile regional economy together with the challenges of servicing foreign currency debt obligations with cash flow primarily denominated in a weakening peso.

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