S&P lowers Bharti's rating on Zain deal

“We lowered Bharti’s rating to reflect our expectation that the company’s leverage and cash-flow protection measures will deteriorate significantly, following its largely debt-funded acquisition of Zain Africa, based on an enterprise value of US$10.7 billion,” S&P said, adding it also presents Bharti with a higher country, political and convertibility risks.

S&P lowered Bharti’s long-term corporate credit rating to ‘BB+’ from ‘BBB-’ but said the outlook is stable. A shift to BB rating category indicates that a company has been moved from investment grade to speculative grade.