Fitch upgrades Pacnet on acquisition

Fitch Ratings said it upgraded Pacnet Ltd.’s long-term foreign-currency issuer default rating to A from B and its $350 million 2018 guaranteed senior secured notes to A from BB with a recovery rating of RR1.

The ratings were removed from Rating Watch positive, where they were placed in December 2014.

The outlook is stable.

The upgrades follow news that Telstra Corp. Ltd. completed its acquisition of Pacnet and intends to soon repay Pacnet’s debt, Fitch said.

The agency also said it simultaneously withdrew Pacnet’s issuer default rating following the acquisition and statement that Telstra intends to repay all of Pacnet’s debt.

Fitch will continue to rate Pacnet’s notes until they are redeemed, after which Fitch will no longer provide ratings or analytical coverage for Pacnet, the agency added.

The rating on Pacnet’s notes is now equalized with Telstra’s rating, Fitch said.

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