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Fitch affirms TIM Hellas
Fitch Ratings said it affirmed TIM Hellas Telecommunications SA's B issuer default and short-term ratings following the announcement of the proposed issuance by Hellas Finance of €500 million pay-in-kind notes to refinance existing pay-in-kind loan obligations, a portion of shareholder loans and to finance a dividend. The notes will not be rated.
At the same time, Fitch Hellas Telecommunications (Luxembourg) V's senior credit facility and senior secured floating-rate notes due 2012 with B+ ratings and recovery ratings of RR3 and Hellas Telecommunications (Luxembourg) III's B- senior notes due 2013 with a recovery rating of RR5.
The outlook is stable.
In Fitch's view, the issuance of pay-in-kind notes at a holding company level will not have a detrimental effect on ratings, provided that the notes do not have any credit support from the restricted borrowing group and do not receive cash interest. In this case, the proposed terms of the notes indicate that they will effectively have only an equity claim on the operating companies.
The issuance of the pay-in-kind notes will result in pro-forma 2005 total leverage of 7.5x.
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