Moody's: Vodafone unchanged

Moody's Investors Service said that Vodafone Group plc's Baa1/prime-2 ratings remain unchanged following news that the Essar Group has exercised its underwritten put option for more than 22% of Vodafone Essar Ltd., and Vodafone has exercised its call option over the remaining 11% of Vodafone Essar-owned by the Essar Group, resulting in a total cash payment of $5 billion.

The final settlement is anticipated to be no later than November 2011.

The outlook remains stable.

The exercise of the put and call option agreements are in line with expectations and have no impact on Vodafone's ratings, given that the $5 billion consideration already is included in Vodafone's consolidated debt, Moody's said.

The agency noted that Vodafone's strong liquidity position - with a cash balance of £7.4 billion as of December 2010 and £6.6 billion in undrawn committed facilities - will allow the group to cover the cash outflows of this transaction without its liquidity profile undergoing major stress.

Moody's said it expects the group's liquidity position to further strengthen with the second tranche of the sale of Softbank's instruments for £1.5 billion in April 2012.

Vodafone remains well-positioned in the Baa1 rating category, with sufficient headroom to accommodate any moderately sized investments the group might make in the context of its strategy, the agency said.

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