LONDON-Mannesmann Aktiengesellschaft and its financing subsidiary, Mannesmann Finance B.V., plan to sell up to $2 billion in euro-denominated commercial paper that will, in part, help finance planned telecommunications investments.
Mannesmann, headquartered in Dusseldorf, Germany, is engaged primarily in three business sectors: telecommunications, engineering and automotive. Mannesmann Mobilfunk is the largest mobile wireless carrier in the country, with 6.6 million customers as of March 31.
Moody’s Investors Service Ltd., London, assigned its highest investment-grade rating of Prime-1 to Mannesmann’s planned commercial paper program.
“We think Mannesmann will remain a leading mobile telecommunications operator in Germany and will become a leading alternative, fully integrated telecommunications operator in Europe, despite the increasingly competitive environment in both fixed and mobile communications,” according to a report by Moody’s analysts Eric de Bodard and Carlos Winzer.
“As a result of increasing mobile penetration rates, we expect Mannesmann to achieve a level of traffic volumes that will partially offset future competitive pressure and thereby improve profitability levels.”
However, de Bodard and Winzer cautioned there are risks involved in “Mannesmann’s ambitious plans to continue to make selective investments in order to take advantage of growth opportunities in the telecommunications industry.”
Nevertheless, the rating agency analysts said they expect the company to fund its future investments in a prudent manner.
