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S&P might lower MegaFon
S&P said it placed its BBB- long-term foreign and local currency issuer credit ratings on MegaFon PJSC on CreditWatch with negative implications.
The agency withdrew the ratings on MegaFon Finance LLC, MegaFon's core financing subsidiary, at the company's request.
S&P also withdrew the BBB- rating on MegaFon Finance's RUB 10 billion senior unsecured domestic bonds due in 2022, owing to their redemption.
MegaFon launched a tender offer to acquire its ordinary shares and global depositary receipts representing 20.8% of its issued and outstanding shares. The transaction is estimated at up to $1.26 billion.
The company also intends to commence the process of delisting the GDRs from the London Stock Exchange shortly after the completion of the tender offer.
“We estimate this will result in leverage increasing to 2.7x from 2.2x-2.3x currently, while we expect the group's free operating cash flow (FOCF) will remain burdened by higher investments to comply with Russia's data-storage law,” S&P said in a news release.
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