Moody’s raises NorCell Sweden CFR to Ba3

Moody's Investors Service said it upgraded NorCell Sweden Holding 2 AB's (Com Hem) corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

The Ba3 rating of the SEK 2.5 billion senior secured notes due 2019 at subsidiary NorCell Sweden Holding 3 AB was affirmed given that following the imminent call redemption of the company's senior notes due 2019 (unchanged at B3), there will no longer be any rating uplift from junior ranking debt for the senior secured notes.

The outlook for all ratings is stable.

Moody’s said the upgrade of the corporate family rating to Ba3 acknowledges the company's solid operating performance and reflects its expectation that NorCell (a) Can achieve continued revenue and EBITDA growth; (b) will maintain its Moody's adjusted debt/EBITDA leverage below 4.5 times; and (c) will keep up operational momentum with ongoing RGU growth and muted churn.

Moody's views the company's growth strategy, which now prioritizes price/ARPU increases over volume growth as credible and acknowledges potential for continued growth in B2B revenue, upselling potential with bundle penetration below European peers and the competitive benefits form the company's high quality network.

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