Israel's Partner seeks court approval on settlement of series A notes

By Susanna Moon

Chicago, Feb. 8 - Partner Communications Co. Ltd. said it filed a notice with the court on Sunday seeking approval of a settlement with holders of its series A notes.

The notice follows the application submitted on Dec. 31 to approve a dividend distribution of NIS 1.4 billion exceeding the surpluses for distribution.

Under the settlement, holders will withdraw objections to the distribution application provided that in the event of a reduction in the current credit rating of the notes by the credit rating company Standard & Poor's Maalot, there will be an increase to the annual linked interest rate in the year 2010 in the amount of 1% for each reduction of one rating category. The increase will be effective from the date of publication of the credit downgrade, and as long as the credit downgrade is valid.

Any increase in the interest rate will be abolished in case of a credit upgrade or by the end of the year 2010, upon the earliest, provided that the period during which the increased interest rate applies is at least three months.

Partner Communications is a Rosh Ha'ayin, Israel, mobile communications operator.

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