The increase in Telefonica's stake in Telco “has no implications on creditworthiness” either for Telecom Italia (Baa3), under-reviewed due to a possible downgrade, or for Telefonica (Baa2 rating with negative outlook). This is what Carlos Winzer, senior vice president of Moody's explains, when asked by Radiocor.
The Telefonica-Telco operation announced this morning therefore does not save Telecom Italia from a possible downgrading of the debt to "junk" level by the rating agencies. Moody's analysts explain this, despite – the traders point out – this morning the bonds of the TLC company reacted positively on the market to the announcement of the increase in Telefonica's share in Telco from 46 to 66%.
The spotlights are on the moves of the president Franco Bernabè and on the decisions that the Telecom board of directors will take on October 3, in particular on the possible proposal for a capital increase. An operation which, even if it were approved by the board, would still have to pass the scrutiny of the shareholders' meeting.
