Telemar Norte Leste (TMAR), the holding company of Brazilian mobile operator Oi, is planning to raise some E750m in senior unsecured notes due in December 2017.
Moody’s released its report on the bond yesterday, and assigned it a Baa2 rating.
The…
Telemar Norte Leste (TMAR), the holding company of Brazilian mobile operator Oi, is planning to raise some E750m in senior unsecured notes due in December 2017.
Moody’s released its report on the bond yesterday, and assigned it a Baa2 rating.
The Moody’s statement said that the proposed new issuance is part of TMAR’s liability management “to improve its debt maturity profile, and will not affect its leverage metrics since the majority of the net proceeds will be used to pay off maturing debt”.
The earliest part of TMAR’s debt to mature will be two debentures.
The first is a BRL 2.16bn (E957m) of senior unsecured debentures issued in two tranches due in 2011 and 2013.
The second is a BRL 2.57bn (E1.139bn) senior unsecured debentures also issued in two tranches due in 2011 and 2013.
Moody’s said that the ratings outlook was stable. This was based partly on its expectation that TMAR will de-lever its balance sheet towards the target leverage of Total Adjusted Debt to EBITDA of below 2.0x.
In its statement, Moody’s said that its rating for TMAR’s debt reflected “the potential for synergies resulting from the increased negotiating power and economies of scale associated with the Portugal Telecom (PT) alliance”.
In July, PT agreed to acquire direct and indirect stakes in TMAR representing the equivalent of 22.4% of the company’s total shares, while Oi will acquire 10% of PT.
The deal also includes an equity injection of BRL12bn in TMAR and Telemar Norte Leste Participacoes S.A.
Brazilian regulator ANATEL has approved the deal, which is expected to close in the second half of 2011.
