Moody's might downgrade Vodafone

Moody's Investors Service said it placed Vodafone Group plc’s A3 senior debt rating on review for downgrade.

“We are putting Vodafone's ratings on review for downgrade because we expect that, in the absence of inorganic measures to reduce leverage, the company's medium- to long-term financial ratios will remain weaker than those commensurate with an A3 rating," Ivan Palacios, a Moody's vice president and senior credit officer, said in an agency news release.

Moody's review will focus on the measures that Vodafone may decide to take in the near term to strengthen its financial profile and the completion of the acquisition of Grupo Corporativo ONO, which the European Commission will rule on in July.

Vodafone's A3 rating reflects its large size and scale and the diversification benefits associated with its strong positions in many different markets, the agency said.

However, the rating also 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.

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