Moody's: OTE outlook stable

Moody's Investors Service said it changed the outlook for Hellenic Telecommunications Organisation SA (OTE) to stable from negative and affirmed its Caa1 corporate family rating, its Caa2-PD probability of default rating and on the Caa1 senior ratings on the global medium-term notes and global bonds issued by subsidiary OTE plc.

The agency said the outlook change reflects the fact that management has substantially improved the company's liquidity risk management and increased its capacity to deleverage through recent asset disposals.

OTE's Caa1 corporate family rating continues to reflect the company's underlying business risk given that it operates in a very challenging market in which revenues remain under pressure due to a contraction in consumer spending and tough competition, Moody's said.

The agency said the Caa2-PD probability of default rating reflects that, despite the improvements achieved, OTE still faces a high risk of defaulting on its bank debt owing to the fact that a substantial amount of that debt is subject to Greek law and therefore susceptible to redenomination.

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