Israel's Partner sets out revised settlement terms for series A notes

By Jennifer Chiou

New York, Feb. 18 - Partner Communications Co. Ltd. announced that it will submit improvements to the settlement terms for its series A notes after negotiations with an additional noteholder.

On Feb. 8, the company said it had filed a notice with the court for approval of the settlement. It added that it will notify the court of the revised terms.

As already reported, the prior 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 original 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 Standard & Poor's Maalot, there will be an increase to the annual linked interest rate in 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, Partner previously announced.

Under the new settlement, Partner said it will continue the increase of the annual linked interest rate for the notes due to credit ratings reductions in 2011 at the rate of 0.5% for each reduction of one rating category. The current credit rating is AA-.

Previously, any increase in the interest rate would have been abolished in case of a credit upgrade or by the end of the year 2010.

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

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