S&P lowers MegaFon view to negative

S&P said it revised the outlook on MegaFon to negative from stable and affirmed its BB+ ratings.

This month, MegaFon acquired shares for RUB83 billion, representing 20.4% of its capital.

This will weaken MegaFon's credit ratios, S&P explained.

The company said it remains committed to its financial policy of targeting 2x net debt-to-EBITDA, the agency added.

Its operating performance has remained sound with revenues growing by 4% in the first nine months of 2018, S&P said, and looking similar for 2019.

The negative outlook reflects that the ratings could be downgraded in the next 12 months if the company fails to maintain an adjusted debt-to-EBITDA ratio of less than 3x and free operating cash flow-to-debt about or higher than 5%, the agency said.

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