LONDON, May 19 /PRNewswire/ -- Fitch IBCA and Duff & Phelps Credit Rating
Co. (DCR) have assigned a 'B+' (Single-B-Plus) senior unsecured rating to
Netia Holdings BV's (Netia) proposed EUR150 million senior unsecured bond
issue and have upgraded the ratings on the existing senior unsecured notes to
'B+' (Single-B-Plus) from 'B' (Single-B). Netia's 'B+' (Single-B-Plus) credit
profile is based upon:
-- Its established position in the Polish market as the leading fixed line
competitive operator to Telekomunikacja Polska SA, Poland's state-controlled
phone company that is undergoing privatization;
-- The evolution of Netia's business focus over the past year from a local
services business to a broader integrated telecoms operator. This has been
accomplished with the recent awards of data communications and domestic long
distance (DLD) licenses in conjunction with a local services license for the
strategically important Warsaw market and the launch of a broad-based, branded
Internet services business;
-- Its improving financial performance. Netia has reported two
consecutive quarters of positive EBITDA and steady increases in revenues,
margins and average revenues per subscriber, with an improving mix of higher
revenue business customers;
-- The Polish regulatory authority's announcement of approvals to
implement regulatory modifications, which should result in accelerated tariff
rebalancing, a more market based approach to the setting of interconnection
rates and tariffs and the postponement by one year (until 2002) of the full
liberalization of the domestic telecoms market. All of these are viewed as
being favorable to Netia; and
-- The demonstrated support shown by the Swedish telecoms operator, Telia
AB (Telia), which has recently agreed to increase its ownership in Netia to
approximately 49 percent and will be participating in the proposed USD125
million share issue being completed simultaneously with this senior notes
offering by committing to purchase up to 50 percent of the transaction. Telia
regards Netia as a strategically important component of its Baltic Sea
telecoms strategy.
Netia Holdings is the largest alternative fixed-line telecommunications
operator in Poland. In March 2000 it won the tender for the Warsaw voice
telephony license and now holds 24 licenses for local telecommunications
services in territories covering some 15 million people or approximately 40
percent of the Polish population. The company's existing local telephone
license territories cover five of the country's 10 largest urban areas
including Krakow, Poznan, Gdansk, Lublin Katowice and several territories
surrounding the city of Warsaw. Netia has also secured the benefit of a
nationwide data and Internet protocol (IP) license to provide data
transmission and Internet-based services. In February 2000 Netia 1, a
consortium led by Netia, was awarded a nationwide domestic long distance voice
license. The business focuses on high use business and residential customers:
approximately 21 percent of its lines are used by business subscribers and in
the first three months of 2000, 28.9 percent of new lines were allocated to
business customers.
To date the company has invested USD491 million in network construction.
The network presently includes 1,650 km of fiber optic backbone (SDH rings),
27 digital switches (all ISDN equipped) and an installed capacity of 441,421
lines, with 268,912 subscriber lines. Netia is nearing completion of a
national fiber optic backbone network which, in addition to enabling the
company to offer voice, Internet and data services in all of Poland's 10
largest cities, will also contribute to reducing interconnect charges as its
subscriber base grows in conjunction with the completion of its local network
build-outs.
The agency's ratings reflect Netia's ongoing investment program to support
its revised strategy of focusing on business and data/IP protocol services.
The rating further reflects its expectation that Netia's revenues and EBITDA
will continue improving as it continues the build-out of its local services
businesses and completes construction of its intercity network. Further
comfort is also derived from the commitment shown by Telia's increased
investment and the strategic importance Telia has indicated Netia has in its
international telecoms activities.
For additional research on the Netia Holdings BV, visit DCR's web site at
http://www.dcrco.com (Quick Search: Netia). DCR's research is also available
on Bloomberg at DCR, First Call's BondCall Direct/Research Direct at
http://www.firstcall.com and Multex at http://www.multex.com, as well as
through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Raymond Hill of Duff & Phelps Credit Rating
Co., +44-0-20-7417-7948, or hillr@dcrco.com, or David Staples of
Fitch IBCA, +44-0-20-7417-4282, or dstaples@fitchibca.com
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