S&P Places Oi S.A. (OIBR) Ratings on CreditWatch Negative (PT)

October 3, 2013 9:32 AM EDT Send to a Friend
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Standard & Poor's Ratings Services placed its global scale 'BBB-' and national scale 'brAAA' ratings, including the corporate credit rating, on Oi S.A. and its subsidiary, Telemar Norte Leste S.A. (TMAR), on CreditWatch with negative implications.

The CreditWatch placement follows Oi's announcement today that it has signed a memorandum of understanding for a proposed merger of Oi S.A., Portugal Telecom
SGPS S.A. (NYSE: PT), and Oi holding companies. The transaction will be funded through a capital increase in cash of R$7 billion to R$8 billion and a capital increase in kind of about R$6.1 billion derived from the contribution of PT assets. The company expects to close the transaction in the first half of 2014.

"Under the proposed merger, Oi, PT, and Oi's holding companies--LF Tel S.A., AG Telecom Participações S.A., and Telemar Participações S.A. will be combined. The new structure will have one holding company based in Brazil, which will be the only listed company of the group," said Standard & Poor's credit analyst Luisa Vilhena.


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