Moody’s cut the rating of Telefónica to Baa3 – Investing.com Spain

MADRID (Reuters) – Moody’s said on Monday that it has cut the rating of Telefonica (MC: a) in one step to Baa3 from Baa2, following the decision of the Spanish carrier to revise its financial policy, which will make it unlikely to meet its previous target of reducing its debt/Ebitda to 2.35 times until December 2017.

“The cut of the rating of the Phone in one step to Baa3 reflects the revised strategy of the company to reduce its debt through free cash flow, organic, and only sell non-strategic assets if an opportunity arises. Although the reduction of dividends is a step in the right direction, as it will preserve your cash and help you to gradually reduce the debt, this change in strategy will delay its efforts to reduce its leverage until December of 2017, ” said Carlos Winzer, a senior vice president of Moody’s and analyst head of Telefónica.

The perspective of the rating of the Phone is stable, pointed to the note of Moody s.

Telefónica announced in late October that he was going to cut the dividend to 2016 and 2017 after the sale of its mobile business in Great Britain stumbled with the regulators and not to leave out his plan to place in the bag its subsidiary of infrastructure Telxius.

At the end of September, Telefónica had a debt of

49.984 million euros.

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