RAMAT GAN, Israel, February 7,
2017 /PRNewswire/ --
Internet Gold - Golden Lines Ltd. (NASDAQ Global Market and
TASE: IGLD) today announced that Midroog Ltd., an Israeli rating
company affiliated with Moody's ("Midroog"), has affirmed an A3.il
local rating of its Series C and D Debentures with a stable
outlook.
Commenting on the news, Mr. Doron
Turgeman, the Company's CEO stated, "We are pleased with
Midroog's announcement. Our debt structure has significantly
improved as indicated in the rating report, which speaks for
itself. In the quarters ahead, we intend to continue our efforts to
strengthen our financial stability and liquidity in order to
improve our debt and equity positions."
The following is a summary of primary considerations for the
rating, as indicated by Midroog:
1. The Company's rating is supported by its indirect control of
Bezeq, The Israel Telecommunication Corp. Ltd. ("Bezeq," Aa2.il,
stable outlook), which has a strong business and financial profile
that also supports good dividend visibility on a significant scope.
Bezeq's rating serves as the starting point for rating the
obligations of Internet Gold, which relies on the flow of dividends
from B Communications Ltd. ("BCOM"), Bezeq's parent company, for
servicing its obligations. The gap between Internet Gold's rating
and Bezeq's rating reflects the additional credit risk arising from
the subordination of Internet Gold's debt to both Bezeq's and
BCOM's debt, as well as from Internet Gold's dependency on
dividends from BCOM.
2. Midroog estimates that the liquidity balances of
Internet Gold, together with the expected dividends from BCOM, will
support the Company's debt service capacity during 2017-2018.
Midroog's base scenario for Internet Gold during 2017-2018 includes
liquidity balances of NIS 376 million
as of September 30, 2016 and
expectations for cumulative dividends from BCOM of NIS 130 million, reflecting dividend
distributions of NIS 200 million by
BCOM to its shareholders.
3. During the years 2017-2018, Internet Gold expects to pay
cumulative interest payments of NIS 86
million as well as cumulative principal payments of
NIS 311 million. Midroog does not
anticipate any distribution of dividends from Internet Gold to its
shareholders. Thus, the debt service coverage ratio (DSCR), which
relies mainly on the liquidity balances of the Company's, is
expected to be in the range of 1.4 and 2.5, respectively, in the
years 2017-2018. Midroog also estimates that the Company will need
to refinance its debt already during 2018 in order to service its
debt from 2019 and onwards.
4. The Company's financial leverage is commensurate with
the rating and supports financial flexibility and refinancing
capability. Financial flexibility is also supported by appropriate
interest service coverage ratios that are expected to range between
1.3 and 1.5, respectively, in the years 2017-2018, as well as by
the fact that all of the Company's shares in B Communications are
unpledged. On the other hand, the level of leverage is relatively
volatile.
5. Midroog also stated that Internet Gold has a relatively
good liquidity profile that supports the debt service capacity in
the short term; however, the potential for full realization of the
liquidity balances is relatively limited in its estimation in view
of the bond series having different durations.
The above description of Midroog's report is only a short
summary of the main points and it should not be relied upon as a
complete description of the full report. The full and report can be
viewed at http://maya.tase.co.il.
About Internet Gold
Internet Gold is a telecommunications-oriented holding company
which is a controlled subsidiary of Eurocom Communications Ltd.
Internet Gold's primary holding is its controlling interest in B
Communications Ltd. (TASE and Nasdaq: BCOM), which in turn holds
the controlling interest in Bezeq, The Israel Telecommunication
Corp., Israel's largest
telecommunications provider (TASE: BEZQ). Internet Gold's shares
are traded on NASDAQ and the TASE under the symbol IGLD. For more
information, please visit the following Internet sites:
http://www.igld.com
http://www.bcommunications.co.il
http://ir.bezeq.co.il
Forward-Looking Statements
This press release contains forward-looking statements that are
subject to risks and uncertainties. Factors that could cause actual
results to differ materially from these forward-looking statements
include, but are not limited to, general business conditions in the
industry, changes in the regulatory and legal compliance
environments, the failure to manage growth and other risks detailed
from time to time in B Communications' filings with the Securities
Exchange Commission. These documents contain and identify other
important factors that could cause actual results to differ
materially from those contained in our projections or
forward-looking statements. Stockholders and other readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date on which they are made.
We undertake no obligation to update publicly or revise any
forward-looking statement.
For further information, please contact: Idit Cohen - IR Manager idit@igld.com /
Tel: +972-3-924-0000
Investor relations contacts: Hadas Friedman - Investor Relations
Hadas@km-ir.co.il / Tel: +972-3-516-7620
SOURCE Internet Gold - Golden Lines Ltd.