Oct. 14 (Bloomberg) -- Hellenic Telecommunications Organization SA, Greece’s largest phone company, had its credit rating cut by Standard & Poor’s as a deteriorating Greek economy adds pressure on the company to refinance maturing debt.
The ranking for the company, known as OTE, was reduced by two levels to B from BB-, with the outlook remaining negative, the rating company said in a statement today.
OTE’s rating may be reduced further if support from Deutsche Telekom AG, which owns a 40 percent stake, weakens and liquidity concerns persist, S&P said. OTE faces 3.3 billion euros ($4.6 billion) of maturing debt from mid-2011 to 2013, the agency said.
“The rating action reflects our view that the group’s liquidity profile has weakened to less-than-adequate under our criteria in the absence of any recent refinancing,” S&P said. “The deteriorating macroeconomic conditions in OTE’s domestic market, including a potential default of the Hellenic Republic, could continue to negatively affect the group’s operating results and access to capital markets.”
Greek Finance Minister Evangelos Venizelos said the government will meet commitments to international creditors to deepen pension and wage cuts, promising parliamentary approval for the draft 2012 budget and austerity measures. The economy is expected to contract 5.5 percent in 2011 and 2.5 percent in 2012, according to the draft budget.
Shares in OTE were up 0.9 percent at 3.53 euros at 3:47 p.m. in Athens, after four days of gains.
--Editors: Matthew Brockett, Tim Farrand
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