S&P ups Eutelsat

Standard & Poor's said it has raised to BBB from BBB- the long-term corporate credit ratings on Eutelsat Communications SA and related entity, Eutelsat SA. The agency also said it raised the short-term corporate credit ratings to A-2 from A-3, along with its long-term senior unsecured debt rating to BBB from BBB-.

The outlook is stable.

The ratings were removed from CreditWatch, where they were placed in September with positive implications.

Any new senior unsecured debt at Eutelsat Communications would be rated BBB-, one notch below that of its operating subsidiary, Eutelsat SA, mainly reflecting a view that the significant amount of priority liabilities at the Eutelsat SA results in structural subordination for debtholders at the Eutelsat Communications level, S&P said.

The ratings reflect Eutelsat Communications' strong operating performance in fiscal 2010 and in the first quarter of fiscal 2011, resulting in a greater-than-expected improvement in credit measures, the agency said.

The upgrade also considers an expectations that the group's revenues and earnings growth prospects remain solid in the medium term despite the recent loss at the launch of its W3B satellite, S&P said.

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