S&P assigns BB- to VEON

S&P said it assigned BB- rating to VEON Ltd. with a stable outlook.

“Mobile operator VEON has a strong market position and good growth prospects in all its markets. Combined with its good geographic diversity, this partly offsets its significant country risk exposure. VEON ranks either No. 1 or No. 2 in four of its six markets, which collectively represent more than 80% of its revenue. It has market-leading positions in Pakistan (30% of revenue) and Ukraine (26% of revenue),” S&P said in a press release.

The agency said it estimates Veon's S&P Global Ratings-adjusted leverage will remain relatively low at around 2x-2.5x, buoyed by a conservative financial policy. Its annual free operating cash flow (excluding spectrum fees) is projected to top $400 million.

“Sustaining this level of leverage is a key support to the rating, and our forecast incorporates the company's long-term financial policy target of maintaining net debt to EBITDA at around 1.5x. This corresponds to about 2.0x-2.5x on our adjusted basis,” S&P said.

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