Moody's Investors Service has confirmed the Aa3 long term foreign and domestic currency ratings for Emirates Telecommunications Corporation Ltd ("Etisalat"). This action concludes the review for possible downgrade initiated on November 11, 2010 after Etisalat announced its intention to acquire 51% of the Kuwait-based Mobile Telecommunications Company LLC (also known as "Zain") for a total purchase price of approximately $12.0bn.
The Aa3 issuer ratings have been confirmed following Etisalat's announcement on March 19 that it would terminate the contemplated acquisition. The outlook is stable.
"As Etisalat no longer pursues buying a significant stake in Zain, which had been the driver for Moody's ratings review, we consequently confirmed the ratings at the Aa3 level," said Martin Kohlhase, a Dubai-based Moody's Assistant Vice President and lead analyst for Etisalat. He added that "the uncertainty over the development of Etisalat's capital structure has been removed and with it the pressure on ratings we had initially seen when Etisalat made the binding offer for the Zain assets in November 2010."
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