Moody's changes Vodafone outlook to negative

Moody's Investors Service said it changed to negative from stable the outlook on Vodafone Group plc's A3 senior debt rating following the announcement that Vodafone has agreed to acquire Grupo Corporativo ONO SA for €7.2 billion.

The outlook change reflects Moody's view that the potential benefits for Vodafone of acquiring ONO could be outweighed by the heightened financial risk implied by the increased debt burden. With this transaction, Vodafone has exhausted the financial flexibility within the A3 rating that it had created following the sale of its 45% equity stake in Verizon Wireless, the agency said.

Moody's said Vodafone's A3 rating reflects its large size and scale, management's approach of balancing shareholder remuneration with creditor protection and the diversification benefits associated with its strong positions in many different markets.

However, the rating additionally factors in the negative trends experienced in Vodafone's core Western European markets, including heightened competition, slowing growth, regulatory pressures and macroeconomic weakness, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.