Moody's rates VimpelCom bonds Ba3

Moody's Investors Service said it assigned a provisional rating of Ba3 (LGD4, 50%) to the proposed issuance of up to $2 billion worth of notes by VimpelCom Holdings BV, a wholly owned subsidiary of VimpelCom Ltd. (Ba3/stable).

VimpelCom OJSC, a wholly owned subsidiary of VimpelCom Holdings BV, will guarantee the notes.

Proceeds will be used to refinance part of the company's subsidiaries' debt maturing in 2013.

The Ba3 corporate family rating reflect the view that, notwithstanding geographic diversification and its significantly larger scale following the acquisition of Wind Telecom SpA in April 2011, VimpelCom remains reliant upon its Russian and Ukrainian subsidiaries consolidated under VimpelCom Holdings BV, which continue to determine its financial flexibility, according to the agency.

Moody's said the highly leveraged nature of Wind Telecom's business in Italy directly affects VimpelCom's ability to service its debt obligations at this time, as Wind Italy is fully ring-fenced from VimpelCom.

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