MOODY'S CONFIRMS THE SENIOR UNSECURED DEBT RATINGS OF TPSA AT Baa3 WITH A POSITIVE OUTLOOK AND ASSIGNS SAME RATING TO PROPOSED US$1BN EMTN PROGRAMME
Moody's Investor Service confirmed at Baa3 with a positive outlook the senior notes of TPSA Finance BV, guaranteed by Telekomunikacja Polska SA (TPSA). At the same time, Moody's assigned a Baa3 rating to the proposed US$ 1 billion EMTN programme of TPSA Eurofinance BV, which is also guaranteed by TPSA. The outlook is positive.
This confirmation completes the review process initiated on 3 September 1999.
The ratings confirmed are:
US$200mm Gtd Snr Notes due 2003
US$800mm Gtd Snr Notes due 2008
The positive outlook reflects the steady operational and financial progress that TPSA has made to date and the expectation that the proposed entry of a strategic investor will bring additional strengths to the company in such areas as network development, marketing and operations.
So far, TPSA is on track to meet its ambitious operational targets of building out access lines by some 1 million a year and improving the quality of its network (digitalisation is almost 70%). These enhancements come against a background of continuing strong pent-up demand and significant projected growth for telecommunications services in Poland. Competition is increasing in local access, and the long distance market will shortly be opened to competition. TPSA, however, is expected to maintain dominant market share over at least the medium term.
Moody's expects the entry of a strategic partner in TPSA's shareholder base to boost significantly the company's ongoing restructuring process. However the final decision has yet to be made as to who that partner will be, the exact timing of entry and what strategic changes the partner will introduce.
However, it is likely that as the company makes further advances, and on clarification of the partner's strategy to help consolidate and promote TPSA's already solid development, further positive pressure should develop on the rating level.
TPSA, headquartered in Warsaw, is the dominant provider of telecommunications services and products in Poland. As at FYE 1998 it has turnover of approximately eq US$ 3bn.
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