Moody’s confirms MegaFon

Moody's Investors Service said it confirmed the Ba1 corporate family rating and the Ba1-PD probability of default rating of MegaFon PJSC.

The outlook is stable.

The action concludes the review for downgrade initiated by the agency following MegaFon's announcement on July 16 that it will buy back up to 20.8% of its ordinary shares via its fully-owned subsidiary MegaFon Investments (Cyprus) Ltd. for up to $1.2 billion and fund the transaction predominantly with new debt.

The company also announced that it will delist from the London Stock Exchange.

On Aug. 23, MegaFon advised that as a result of the tender offer it will buy back 18.6% of the company's issued and outstanding shares for a total consideration of about $1.12 billion.

The share buyback and subsequent delisting are in line with the company’s previously announced new business strategy which will involve broader partnerships with state-owned corporations, transactions with higher risks, investments in infrastructure with lower returns, higher leverage and lower dividends, Moody’s said.

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