Belgacom Finance's US$1B Euro MTN Prog Rtd 'AA' by S&P.LONDON--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/16/97 -- Standard & Poor's today assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. its double-'A' long-term rating to Belgacom Finance S.A.'s US$1 billion Euro MTN MTN A short-form for Medium Term Note. MTN Medium term notes issued by corporations, much like shorter-term commercial paper. MTN See medium-term note (MTN). program, guaranteed by Belgacom S.A. (Belgacom). At the same time, Standard & Poor's affirms Belgacom's double-'A' long-term corporate credit and senior unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. ratings. The ratings reflect Belgacom's operational strength in an increasingly competitive industry and its solid cash flow generation. Also, implicit State support for its obligations is a significant, though decreasingly important, rating factor. The company owns and operates the Belgian fixed telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. network and the country's largest mobile company. With its monopoly on Belgian fixed-telephony soon to expire and increasing competition in the industry across Europe, market share and prices should be pressured on the Belgian market. In recent years, Belgacom has vastly improved its marketing position, in particular through a much more refined knowledge on customers needs, a wider and much more segmented product range, and a closer marketing presence. Strong ongoing tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic reductions, which continued in early 1997, should also enhance the company's competitive position as well as overall market growth. Also, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite moderate expected market share erosion and emerging competition on the Belgian market, particularly on mobiles, Standard & Poor's continues to view Belgacom as dominant on a rapidly growing market. Belgacom's financial profile has significantly improved in recent years. In 1996, the surplus of cash flow (Belgian franc Noun 1. Belgian franc - formerly the basic unit of money in Belgium franc - the basic monetary unit in many countries; equal to 100 centimes centime - a fractional monetary unit of several countries: France and Algeria and Belgium and Burkina Faso and (BFr) 47.3 billion, equivalent to about US$1.3 billion) over capital expenditures (BFr28 billion) remained strong. Pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern net interest coverage improved to 4.8 times (x) in 1996, from 3.3x in 1995. The result for the first six months 1997 show a revenues increase by 10.3%, and an increase in cash flow by 10.5% to BFr24.8 billion. Medium term, and in spite of the servicing of the still heavy pension-related off balance sheet liability, Standard & Poor's expects Belgacom's free cash flow generation to increase and high debt (BFr88 billion at year-end 1996) to strongly decrease to levels in line with current ratings. The reliance of Belgacom's current ratings on implicit State support, as opposed to individual performance, gradually diminishes. The State's share into Belgacom is not expected to decrease below the current 50% medium term. The balance is owned by a consortium of foreign telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. operators and Belgian investors. OUTLOOK: Stable. It is expected that Belgacom will be able to continue to reduce net debt through healthy free cash flow generation and to maintain its strong competitive position in the Belgian telecoms market despite increasing competition, Standard & Poor's said. -- CreditWire CONTACT: Emmanuel Dubois-Pelerin, Paris (33) 1-4420-6673 Louis Landeman, Stockholm (46) 8-440-5917 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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