S&P lowers Orascom Telecom

Standard & Poor's said it lowered the long-term corporate credit ratings on Orascom Telecom Holdings SAE and Orascom Telecom Finance SCA to B from B+ following weaker growth expectations from its Pakistan- and Bangladesh-based operations.

The outlook is stable.

The agency lowered its $750 million senior unsecured notes issued by Orascom Telecom Finance to CCC+ from B-.

The downgrade primarily reflects expectation of slower EBITDA growth from two of Orascom Telecom's important future growth engines, the agency noted.

"The downgrade also reflects concerns that a weakening economic environment in the Islamic Republic of Pakistan (foreign-currency CCC/developing/C; local-currency CCC+/developing/C) may result in the need for Orascom Telecom to provide higher-than-expected support to Mobilink over the next 12 to 18 months to ensure that Mobilink can service debt coming due and to ensure compliance with financial covenants," S&P analyst Michael O'Brien said in a statement.

Ratings are supported by Orascom Telecom's growth in Algeria, Tunisia and Egypt, which generate the bulk of cash flow for the group, the agency noted.

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