S&P Maalot downgrades Bezeq, Pelephone

S&P Maalot: Bezeq's financial profile is harmed by limited financial flexibility caused by the aggressive dividends policy.

Standard & Poor's Maalot Ltd. has downgraded the bonds of Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) and its mobile subsidiary Pelephone Communications Ltd. to AA with a "Stable" outlook. Citing the very close connection between Bezeq and Pelephone, Maalot said that the ratings of the two companies were the same.

Maalot said, "Due to the dynamic telecommunications' market exposure to increased competition and regulation in the recent period, we believe that Bezeq's business profile has weakened. The company's financial profile continues to be adversely affected from limited financial flexibility caused by the aggressive dividends policy and from what we believe is a modest increase in leverage in the short term." Maalot doubts that Bezeq's policy of distributing all its profits will not change any time soon.

Maalot cites, "The companies' sensitivity to changes in the character of the telecommunications market, which are liable to adversely affect their financial profile in the long term," as the reason for the downgrade. However, it adds, "The 'Stable' outlook reflects our assessment that there will be no further weakening of the companies' financial profile and business standing, and that Bezeq will continue to maintain stable high cash flows and profit margins."

Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Your name
Please insert your name
Content
Hyperlink in a new window Hyperlink Right Left underline italic bold Bulleted List Ordered List Face1 Face2 Face3 Face4 Face5 Face6
Your comment

Thanks
You comment was recieved and soon will be published.
In posting comments, I agree to abide by the Terms of Use
Globes encourages lively and frank debate, but posts that the editors consider merely abusive or otherwise inappropriate will be removed. Report inappropriate content
Thank you for posting your comment, which will be reviewed for publication.
Loading Comments...load
Load more comments
Twitter Facebook Linkedin RSS Newsletters גלובס