S&P ups Vodafone to stable

Standard & Poor's said that it revised the outlook on Vodafone Group plc to stable from negative and affirmed the A- long-term and A-2 short-term corporate credit ratings.

The outlook revision and rating affirmations follow Vodafone's announcement on April 4 of an agreement to sell its 44% stake in SFR to Vivendi SA (BBB/stable/A-2) for a cash consideration of £6.8 billion as well as a final dividend from SFR of £176 million.

Vodafone intends to use £4 billion of the proceeds for a share buyback program and the remainder to reduce net debt.

The current ratings reflect the assumption that Vodafone's financial policy will support deleveraging in the coming quarters and that the group will therefore manage to achieve cash flow protection measures that are considered adequate for the current ratings, the agency said.

The stable outlook reflects the view that Vodafone's credit metrics are likely to improve as a result of the group's sale of its stake in SFR and continued improvement in operating performance.

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