TRIBUNE NEWS NETWORK

DOHA

MOODY’S Investors Service on Monday said that Qatar Telecom’s (Qtel) recently announced sizable rights issue and new financial policy are credit-positive, but will not affect the company’s long-term A2 issuer rating.

The announcement strengthens Qtel’s baseline credit assessment (BCA) of 9, which is equivalent to Baa2 on Moody’s global rating scale. Moody’s previously stated expectation of a gradual strengthening of Qtel’s BCA and had already been embedded in Qtel’s A2 rating.

In conjunction with the release of its year-end 2011 financial results on March 5, 2012, Qtel announced that its board had recommended a capital increase via rights issue that would result in an inflow of up to QR6.9 billion ($1.9 billion), if approved by its shareholders and relevant local regulatory authorities.

In addition, Qtel’s board has tightened the financial metric guidance under which the company will operate in the future to a consolidated net debt/EBITDA range of 1.5 to 2.5 times from a previous 2.5 to 3.0 times.

Moody’s understands that the funds from the capital increase will support Qtel’s roll-out of the next-generation mobile telephony technology 4G/LTE as well as further investments in its fibreoptics network.

The funds will also allow the company to participate in growth.