S&P removes RCS&RDS credit rating from CreditWatch positive

Standard & Poor’s (S&P) rating agency affirmed its long-term corporate credit rating on RCS&RDS, one of the biggest telecom operators in the region, with annual turnover worth above 700m dollars, and removed it from CreditWatch, where it had been placed with positive implications as the company did not launch a planned 200m dollar bond issue to refinance debts and strengthen liquidity, Mediafax reports quoting an S&P release. The agency considers RCS&RDS will need additional refinancing to cover its 375m-dollar debts due in 2012 in the absence of exceptional moves to curb investment to maintain liquidity. Thus, the long-term credit rating was affirmed at “B”, with a stable outlook. At the same time, the agency withdrew the “B+” debt rating on the company’s proposed 200m-dollar senior unsecured bond issue. Despite a new 100m-dollar revolving credit facility, RCS&RDS’ liquidity is still relatively weak, points out the agency. RCS&RDS generated 24.7m-dollar positive free operating cash flow in 2009. “We anticipate that this will improve significantly over the next two years, on the back of EBITDA growth and lower capital expenditures following earlier network investments,” stated S&P analyst Michael O’Brien.