There is very little room for financial underperformance in Valentia's takeover plan for Eircom, according to credit rating agency Standard and Poors.
Today S&P assigned a BBB- long-term rating on Valentia Telecommunications, the Tony O'Reilly led consortium which is taking over Eircom.
S&P said Valentia would be 'highly leveraged' on completion of the Eircom deal and, as a consequence, would have to reduce its financial risk by delivering on its business plan and improving its cashflow relative to debt.
The agency also gave a BBB- bank loan rating to Valentia's 2.4 billion euro senior unsecured facilities, which will partly fund the three billion euro deal.
Standard & Poor's said Valentia's ratings were underpinned by Eircom's 78% share of the Irish fixed line market and its 'high quality earnings'.
