Standard & Poor´s announces credit rating for TeliaSonera AB
Standard & Poor´s announces credit rating for TeliaSonera AB
Rating agency Standard & Poor's today announced the credit rating for
TeliaSonera following the merger between Telia and Sonera. The new long
term credit rating of TeliaSonera AB is "A". The former Telia credit
rating was "A+" and the Sonera credit rating was "BBB".
TeliaSonera AB is the borrowing entity for refinancing and new financing
of the TeliaSonera Group going forward.
"Overall, we do not expect the Standard & Poor's action to have any
significant cost impact on TeliaSonera AB's debt financing", says Kim
Ignatius, CFO of TeliaSonera.
For further information journalists can contact:
Krister Kylås, TeliaSonera AB, phone +46 8 713 62 71
N.B. See below the attached press release from Standard & Poor´s.
TeliaSonera AB Long-Term Ratings Lowered to 'A' After Merger With
Sonera; Still on Watch Neg
S&P Lwrs TeliaSonera AB Rtgs to 'A'; Still Watch Neg
LONDON (Standard & Poor's) Feb. 5, 2003--Standard & Poor's Ratings
Services said today it lowered its long-term corporate credit and senior
unsecured debt ratings on Nordic telecommunications services provider
TeliaSonera AB, formerly Telia AB, to 'A' from 'A+' following the
closure of the merger between Telia AB and Finnish telecoms services
provider Sonera Corp. (Sonera).
The 'A' long-term and 'A-1' short-term corporate credit and debt
ratings on TeliaSonera remain on CreditWatch with negative implications.
In addition, the 'BBB' long-term and 'A-2' short-term ratings on
Sonera remain on CreditWatch with positive implications.
The lowering of the ratings on TeliaSonera is consistent with the
rating indication that Standard & Poor's gave on March 27, 2002, when it
placed the ratings of Telia and Sonera on CreditWatch following the
announcement of the planned merger.
"The rating action reflects the diluting effect on Telia's credit
strength of its merger with Sonera, which has a 'BBB' long-term
corporate credit rating, four notches below the previous 'A+' rating on
the former Telia," said Standard & Poor's credit analyst Leandro de
All ratings remain on CreditWatch pending a meeting between
TeliaSonera and Standard & Poor's to review--inter alia--TeliaSonera's
financial forecasts, financial policy, emerging market risk tolerance,
and business strategy. Based on current information, the corporate
credit rating on TeliaSonera is expected to remain in the mid to low 'A'
rating category. Standard & Poor's will also evaluate the likely level
of implicit credit enhancement that TeliaSonera will provide for Sonera
bondholders in the absence of explicit credit enhancement. This
evaluation will determine whether the senior unsecured debt ratings on
TeliaSonera and Sonera are to be equalized.
The ratings on TeliaSonera reflect the group's leading market
positions in its domestic markets (Sweden and Finland), its strong
positions in the Baltic region, and good free cash flow generation. Key
risk factors include:
-- Competitive and regulatory pressures in the Swedish and Finnish
-- TeliaSonera's exposure to higher risk markets such as in Russia,
Eurasia, and Turkey;
-- Exposure to loss-making international carrier and service
businesses operations; and
-- The integration risk relating to the ongoing merger process.
Complete ratings information is available to subscribers of
RatingsDirect, Standard & Poor's Web-based credit analysis system, at
www.ratingsdirect.com. All ratings affected by this rating action can be
found on Standard & Poor's public Web site at www.standardandpoors.com;
under Fixed Income in the left navigation bar, select Credit Ratings
Actions. Alternatively, call one of the Standard & Poor's Ratings Desks:
London (44) 20-7847-7400; Paris (33) 1-4420-6705;
Frankfurt (49) 69-33- 999-223; Stockholm (46) 8-440-5916.
ANALYST E-MAIL ADDRESSES
Leandro de Torres Zabala, London (44) 20-7826-3821;
Peter Kernan, London (44) 20-7826-3618
This press release may contain forward-looking statements regarding
TeliaSonera´s mandatory redemption offer to Sonera´s shareholders and
warrantholders. Statements that are not strictly historical statements,
including statements about TeliaSoneras and Sonera's beliefs and
expectations, constitute forward-looking statements. By their nature,
forward-looking statements are subject to risk and uncertainty because
they relate to events and depend on circumstances that will occur in the
future. TeliaSonera and Sonera are under no obligation to, and expressly
disclaim such obligation to, update or alter their forward-looking
statements, whether as a result of new information, future events or
Restrictions on Ability of Certain Persons to Participate in the
Mandatory Redemption Offer. Due to restrictions under the securities
laws of Australia, the Hong Kong Special Administrative Region of the
People´s Republic of China, Japan and New Zealand, the mandatory
redemption offer, insofar as it comprises an offer of TeliaSonera
securities, will not be made in any of Australia, the Hong Kong Special
Administrative Region of the People´s Republic of China, Japan or New
Zealand. The mandatory redemption offer will, however, insofar as it
comprises an offer of cash, be made in Australia, the Hong Kong Special
Administrative Region of the People´s Republic of China, Japan and New
Due to restrictions under the laws of Italy and South Africa, the
mandatory redemption offer, both as it comprises an offer of TeliaSonsea
securities or cash, will not be made in Italy or South Africa.
On December 9, 2002, Telia announced the completion of its exchange
offer for all of the outstanding shares, including shares in the form of
American depositary shares, or ADSs, and certain warrants of Sonera.
Effective December 9, 2002, Telia changed its name to TeliaSonera. As a
result of the completion of the exchange offer, TeliaSonera, pursuant to
Finnish law, commenced a mandatory redemption offer to acquire all of
the outstanding shares, including shares in the form of ADSs, and
warrants of Sonera were not tendered in the exchange offer. The contents
of this document are neither an offer to purchase nor a solicitation of
an offer to sell shares of TeliaSonera. Any offer in the United States
will only be made through a prospectus, as amended or supplemented,
which is part of a registration statement on Form F-4 which Telia
originally filed with the U.S. Securities and Exchange Commission (the
"SEC") on October 1, 2002. Sonera shareholders who are U.S. persons or
are located in the United States are urged to carefully review the
registration statement on Form F-4, as it may be amended from time to
time, the prospectus, including any amendments or supplements thereto,
included therein and other documents relating to the offer that
TeliaSonera has filed or will file with the SEC because these documents
contain important information relating to the offer. You may obtain a
free copy of these documents at the SEC's web site at www.sec.gov. You
may also inspect and copy the registration statement on Form F-4, and
any amendment thererto, as well as any documents incorporated by
reference therein at the public reference room maintained by the SEC at
450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC at 1-
800-SEC-0330 for further information about the public reference room.
These documents may also be obtained free of charge by contacting
TeliaSonera AB, Investor Relations, SE-123 86 Farsta, Sweden. Attention:
External Communications or Investor Relations (tel: +46 8 7137143, or
Sonera Corporation, Teollisuuskatu 15, P.O. Box 106, FIN-00051 SONERA,
Finland. Attention: Investor Relations (tel: +358 20401). YOU SHOULD
READ THE PROSPECTUS, AND ANY AMENDMENTS OR SUPPLEMENTS THERETO CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE OFFER.
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