Mobinil's subordinated bond rating upgraded

Nile Rating, a member of FitchRatings, the international rating agency, upgraded the National Subordinated Secured Debt rating of the Egyptian Company for Mobile Services

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By  Massoud Derhally Published  June 10, 2002

Nile Rating, a member of FitchRatings, the international rating agency, upgraded the National Subordinated Secured Debt rating of the Egyptian Company for Mobile Services S.A.E’s (“ECMS”) EGP340million bond issue with an eight year maturity and a coupon of 12.25% from ‘BBB’(egy) to ‘BBB+’(egy). The rating outlook is stable.

A ‘BBB’ grade denotes an adequate credit risk relative to other issues in the same country. However, changes in circumstances or economic conditions are more likely to affect the capacity for timely repayment of these financial commitments than they are to affect debt issues with a higher rated category. The ‘+’ qualification is appended to the national rating assigned to denote relative status within the major rating category.

The upgrade reflects ECMS’ success in maintaining its strong market position as one of the leading mobile operators in Egypt, its continued achievement of strong customer growth on the back of a rising penetration rate, its new strategy shifting from ‘Growth’ targets to ‘Value associated with Growth’ targets, and the shift of the business to a net free cash flow positive position. The upgrade also reflects the improved performance of the company over the last two years. For instance, the company’s EBITDA rose from EGP880m in 2000 to EGP 1,392.6m in 2001.

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