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Telecom Italia along with its senior unsecured debt was upgraded by two notches to BB from B+ by S&P. This comes post the closing of its NetCo Sale deal for €14bn to KKR on July 1. The proceeds from the disposal will help the telecom operator significantly reduce debt, thereby leading to improvement in its credit profile, according to S&P. Despite the disposal increasing the business risk for Telecom Italia due to lower earnings and diversification of revenue, the company will retain its strong position in its domestic Italian market and in Brazil as well. Telecom Italia was previously upgraded to Ba3 by Moody’s last month, citing similar reasons.
Telecom’s Italia’s bonds were trading stable with its 6% 2034s at 90.4, yielding 7.35%.