S&P upgrades OTE, debt to B+

Standard & Poor's said it raised its long-term corporate credit rating on Hellenic Telecommunications Organization SA (OTE) to B+ from B and affirmed its B short-term corporate credit rating.

The outlook is stable.

In addition, the agency raised its issue ratings on the debt issued by OTE's wholly owned financing vehicle, OTE plc, to B+ from B.

S&P said the upgrade primarily reflects its view that the likelihood that Greece would leave the eurozone has declined to less than one-in-three within its forecast horizon to 2018.

The agency sees the influence of elected officials on both ends of the political spectrum who called for euro area withdrawal as diminished and expect in the base case that Greece's new government will maintain a constructive relationship with its creditors.

Consequently, OTE’s rating is no longer capped at B.

However, S&P said it does cap the rating at B+ at this stage, mainly because of the still "very high" country risk, the uncertainties over cash collection in Greece, and the adverse economic conditions in Greece with capital controls still in place.

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