S&P cuts MegaFon to junk

S&P said it lowered its long-term foreign and local currency issuer credit ratings on MegaFon PJSC to BB+ from BBB- and removed the ratings on MegaFon from CreditWatch, where S&P placed them with negative implications on July 27.

The outlook is stable.

The downgrade follows MegaFon's announcement that, as a result of the tender offer made by its wholly owned subsidiary MegaFon Investments (Cyprus) Ltd., it will purchase global depositary receipts and ordinary shares in a mostly debt-financed transaction, S&P said.

Combined, the GDRs and ordinary shares represent 18.6% of MegaFon's issued and outstanding shares totaling RUB 76 billion.

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