Moody’s puts Adria Midco under downgrade review

Moody’s Investors Service said it placed under review for downgrade the B2 corporate family and the B2-PD probability of default ratings of Adria Midco and the ratings of its wholly owned subsidiary United Group BV following the announcement that United Group agreed to acquire 100% of Bulgarian Telecommunications Co. (Vivacom) for an undisclosed amount.

Moody’s also put under review for downgrade the B2 rating of the existing €1.65 billion senior secured notes (split into three tranches, €575 million due 2022, €525 million 2024 and €550 million 2025) sold by United.

“We have placed Adria’s ratings on review for downgrade because the debt-financed acquisition of Vivacom will likely result in weaker credit metrics, at a time when the company is growing rapidly through M&A with higher integration and execution risks. Prior to this transaction, Adria’s rating was already weakly positioned at B2, with a negative outlook,” said Agustin Alberti, a Moody’s a vice president, senior analyst and lead analyst for Adria, in a press release.

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