Moody's rates Orascom note B2

Moody's Investors Service said it assigned a provisional Ba3 corporate family rating to Orascom Telecom Holding SAE and a provisional B2 rating to Orascom Telecom Finance SCA's proposed issuance of $500 million senior notes.

The outlook is stable.

The agency said the Ba3 rating reflects the economic, political and foreign exchange risk in Orascom Telecom's countries of operations; revenue and EBITDA concentration with a significant part of revenue and EBITDA being derived from Algeria followed by Pakistan and Iraq; Orascom Telecom's dependence on dividends from its subsidiaries to service its own debt obligations, including the proposed senior notes; pressure to upstream dividends to service debt obligations of its majority shareholder, Weather Capital SARL; and uncertainty associated with event risk.

The rating also takes into account the company's presence in high-growth markets with low-to-modest levels of mobile penetration, its leading market positions in most of its countries of operation, the presence of limited minority ownership in its subsidiaries and its relatively modest leverage supported by a financial policy target of keeping the net debt-to-EBITDA ratio below 2x, Moody's said.

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