As investors are pondering whether to accept a discounted bond tender offer from Pakistan Mobile Communications, Standard Poor's yesterday issued a note saying that if the proposed transaction is completed, it would view it as being tantamount to default. One reason, it says, is that the offer represents a material discount to face value.
The ratings agency also believes that the mobile operator could face difficulty servicing its debt obligations and complying with its covenants over the next one to two years, and has consequently downgraded the company's long-term corporate credit rating -- and that of this particular bond -- to CC with a negative outlook from B-. The bonds are rated B3 by...
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