Moody's Investors Service ("Moody's") has today affirmed Silknet JSC's (Silknet or the company) B1 corporate family rating (CFR) and B1-PD probability of default rating (PDR). Concurrently, Moody's has assigned a B1 instrument to the new USD300 million senior unsecured notes due 2027 to be issued by the company and affirmed the B1 instrument rating on the existing USD200 million senior unsecured notes due 2024.
"The outlook has been changed to stable from negative.The net proceeds from the issuance of the new notes will be approximately USD250 million after the deduction of the issuer acquiring substantially immediately USD50 million of the new notes and estimated costs and expenses. These net proceeds will be used by the issuer to (1) repay the USD200 million senior unsecured notes due April 2024 as soon as possible or by the optional redemption date occurring in April 2022, (2) pay any premia and fees payable in connection with the tender offer for the senior unsecured notes due 2024, (3) to repay the senior unsecured notes due 2022, and (4) to use the remaining proceeds for general corporate purposes.RATINGS RATIONALE"The change of outlook to stable reflects (1) the improved operating performance of Silknet from Q2 2021 driven among others by the lifting of lockdowns imposed following the outbreak of the coronavirus pandemic and the recovery of Georgia's (Ba2 stable) economy, (2) the expectation of continued growth in revenue and EBITDA at above mid-single digit rates over the next two years driven by positive underlying growth in demand as well as more favourable regulatory environment supporting the de-leveraging of the company, (3) the improved maturity profile of Silknet pro forma for the refinancing, and (4) the adequate liquidity position of the company pro forma for the refinancing supported by a large cash balance mitigating the termination of the existing USD20 million revolving credit facility", says Sebastien Cieniewski, Moody's lead analyst for S
