Moody's may up France Telecom

Moody's Investors Service said it placed the Baa2 long-term debt ratings of France Telecom SA and its guaranteed subsidiaries on review for possible upgrade. France Telecom's Prime-2 short-term rating has been affirmed and is not affected by the review process.

Moody's said the rating review will focus on the extent to which France Telecom will continue to strengthen its debt protection ratios in the future as well as to continue to deliver on its successful strategic operating plan.

More specifically, Moody's will assess during its review process the likelihood that France Telecom will attain and sustain in the near term a funds from operations to gross interest coverage ratio of about 6x and an adjusted RCF to adjusted net debt ratio of circa 25%, which would position the company for an upgrade to Baa1, assuming that current business and operating risk levels remain stable.

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