Moody's lowers Wind Hellas

Moody's Investors Service said it downgraded the corporate family and probability-of-default ratings of Weather Finance III to Caa3 from Caa1, the senior secured notes issued at Hellas Telecommunications V to Caa3 from Caa1 and the senior unsecured notes issued at Hellas Telecommunications III to Ca from Caa3. The ratings remain on review for further downgrade.

The action follows the company's results for the first five months of 2010 and reflects the higher probability of default given the continuing decline in performance in an extremely tough operating environment and Wind Hellas's very weak liquidity position and the prospects of an imminent covenant breach, according to the agency.

The downgrade also reflects an unsustainable capital structure in a period when a further deteriorating macroeconomic environment in Greece as well as continued aggressive competition are, in spite of the company's efforts to cut costs, putting severe pressure on profitability and cash flow generation, the agency noted.

As of May 31, Wind Hellas had leverage of about 6.9x debt to EBITDA.

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