Moody's lifts Eileme 2 notes, rates CFR Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating and a Ba3-PD probability of default rating to Eileme 2 AB (publ), an intermediate holding company that indirectly owns 100% of Polkomtel Sp zoo.

Concurrently, the agency withdrew the B1 corporate family rating and B1-PD probability of default rating at the Eileme 1 AB (publ) level.

Moody's also upgraded the rating on the €542.5 million and $500 million senior subordinated notes due in 2020 issued by Eileme 2 AB to B2 from B3, and the rating on Eileme 1 AB (publ)'s $201 million worth of payment-in-kind notes due in 2020 to B3 from Caa1.

The agency will withdraw the rating on Eileme 1's PIK notes once they are repaid on May 30.

The outlooks are stable.

"The Ba3 rating assigned to Eileme 2 is one notch above the B1 CFR that we previously assigned to Eileme 1. The differential primarily reflects the expectation that Polkomtel's credit quality will be aligned with Polsat once Polkomtel's debt is refinanced in 2016 within Polsat's financing structure," Moody's vice president and senior credit officer Ivan Palacios said in a news release.

"While Polkomtel's credit metrics will be initially weak for the Ba3 rating category, we give the company credit for (1) the track record of debt reduction since the original rating assignment in 2012; and (2) the potential business risk profile benefits of its integration with Polsat."

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