Moody's rates Orange bonds Baa3

Moody's Investors Service said it assigned a Baa3 long-term rating to Orange SA's proposed perpetual six-year non-call deeply subordinated hybrid bonds.

Orange will issue the bonds under its €30 billion medium-term note program.

All of the other ratings on Orange and its guaranteed subsidiaries are remain unchanged.

The outlook is stable.

The size of the hybrid bonds is €1 billion.

The proceeds will be used to refinance pre-existing hybrid securities.

The rating on the hybrid bonds is two notches lower than Orange's senior unsecured rating of Baa1, primarily because the bonds are deeply subordinated to other debt and only senior to common equity in the company's capital structure, Moody's said.

The ratings reflect the group's significant scale and international diversification, which enhance its business model and mitigate its exposure to the competitive French market, the agency said.

The ratings also consider its commitment to maintaining prudent financial ratios and balanced cash distribution, along with a strategy of competing aggressively and increased business risk following the launch of Orange Bank, Moody's said.

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