Moody's might downgrade Mobilink

Moody's Investors Service said it placed Pakistan Mobilink Communications Ltd.'s B2 local-currency corporate family rating and Caa1 senior unsecured bond rating under review for possible downgrade.

The rating action is mainly prompted by the deteriorating credit profile of Mobilink's parent, Orascom Telecom Holding, following Orascom's recent disputes with the Algerian tax authorities, the agency said. This has led to Moody's concerns over the ability of Orascom to provide financial support to Mobilink given the recent history of reliance on equity injections from Orascom to ensure covenant compliance under Mobilink's loan agreements.

On a standalone basis, Mobilink's financial metrics are strongly positioned within the B2 rating, Moody's said, reflecting the company's established brand, leading market position and extensive network coverage as well as its moderate leverage and strong margins.

However, these strengths have been largely offset by the company's tight liquidity profile and ongoing pressure to meet its financial covenants under bank loan agreements, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.