NEW YORK-Deutsche Telekom AG has received an investment grade rating of Aa1 from Moody’s Investors Service for its $3.26 billion debt issuance program sold in European Currency Unit denominations.
An ECU is based on a basket of European Community country currencies. One ECU was valued Jan. 13 at US$1.085.
Deutsche Telekom, headquartered in Bonn, Germany, is the largest telecommunications carrier in Europe and the third-largest in the world.
With 45 million access lines, it is the primary provider of landline telephone service in Germany. DT also operates the country’s largest mobile telecommunications network, with about 3.8 million subscribers.
As Germany’s largest cable TV carrier, it has 17 million subscribers.
Moody’s said its rating reflects its belief that Deutsche Telekom will continue to be Germany’s dominant landline carrier, despite the current deregulation of the European telecommunications market that began on Jan. 1.
Moody’s also said it believes the German government will continue to be a partial owner of the company.
“Moody’s anticipates that revenue loss from long-distance tariff reductions and increased competition will be offset by income from new value-added services and continued growth in mobile communications,” said Richard Stephan, managing director, and Carlos Winzer, vice president of European Corporate Ratings for Moody’s, Investors Service in London.
“We believe that DT’s future international investments and continued domestic network capital expenditures will be funded in a way that enables the company to continue to reduce its debt over time.”
