Moody’s upgrades VimpelCom, debt

Moody's Investors Service said it upgraded VimpelCom Ltd.’s corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2 -PD from Ba3-PD.

Concurrently the agency upgraded the long-term issuer ratings of VimpelCom PJSC to Ba2 from Ba3 and the senior unsecured ratings of its guaranteed debts issued by VIP Finance Ireland Ltd. and VimpelCom Holdings BV to Ba2 (LGD 3) from Ba3 (LGD 3).

Moody's also upgraded the senior unsecured rating of the debts issued by GTH Finance BV and guaranteed by VimpelCom Holdings to Ba3 (LGD 5) from B1 (LGD 5).

The outlook is stable.

Moody’s said the action reflects its view that the financial and operational risks related to the ownership of Wind Telecomunicazioni SpA (B2 positive) have substantially subsided for VimpelCom as a result of its deal with CK Hutchison Holdings Ltd. (A3 stable).

The deal, approved by the European Commission on Sept. 1 and by the Ministry of Economic Development of Italy on Oct. 24, combines VimpelCom's 100% owned subsidiary Wind with Hutchison's subsidiary 3 Italia SpA (not rated) in a 50/50 joint venture.

While the agency maintains a view that deconsolidation of Wind's debt does not fully relieve VimpelCom's credit profile of all contingent liabilities associated with high levels of Wind's debt, it said it considers such risks largely mitigated by the partnership with a strong strategic investor such as Hutchison.

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