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TEXT-Fitch affirms SES at 'BBB'; outlook stable
2012年10月4日 / 下午4点02分 / 5 年前

TEXT-Fitch affirms SES at 'BBB'; outlook stable

Oct 4 - Fitch Ratings has affirmed Luxembourg-based satellite operator SES
SA's (SES) Long-term Issuer Default Rating (IDR) at 'BBB' and
Short-term IDR at 'F2'. The Outlook is Stable. SES's and SES Global Americas
Holding GP's senior unsecured debt has also been affirmed at 'BBB'.

The affirmation reflects SES's highly visible, non-cyclical and geographically
diverse revenue streams, supported by its contracts which are typically
contracted under long-term agreements (10-15 years) and by its solid underlying
demand drivers. These include the increasing capacity requirements associated
with a growing number of high-definition TV services, and increasing demand for
direct-to-home satellite services in emerging markets.

The Stable Outlook is underpinned by SES's position as one of the leading
players in the fixed satellite service sector which is protected by high
barriers to entry. Access to the orbital slots needed to operate a
geosynchronous satellite is limited and the most desirable orbital slots rarely
change hands. Economies of scale are also significant from the point of view of
spreading operational and capital spend over a larger fleet and in providing a
hedge against the risk of satellite failure.

The challenge for SES is to commercialise its new capacity at a time when its
main competitors are also expanding capacity. SES needs to manage pricing as new
satellites being brought into service across the industry create regional
variations in supply and demand. There is solid growth potential in emerging
markets but SES has to manage profitability as revenue per transponder may be
lower than in developed markets.

Fitch expects cash flow from operations (CFO) to remain stable over the medium
term, underpinned by the high (over 80%) EBITDA margin in the infrastructure
segment, which accounted for around 80% of group revenue (before eliminations)
in H112. However, SES's free cash flow (after dividends) is expected to be
negative in 2012 and 2013, according to Fitch's conservative assumptions. This
is because SES is investing EUR3.2bn (cumulatively over 2011-2014, excluding two
to four possible incremental satellites to cover Asia-Pacific and Latin America)
to replace ageing satellites and increase the capacity of its satellite fleet by
19% by year-end 2014. Also, dividend growth is likely to continue over the
medium-term.

SES is committed to maintaining its unadjusted net debt/EBITDA below 3.3x even
as the company continues to invest for growth. Fitch considers a ceiling of 3.3x
to be consistent with a 'BBB' rating for a business with SES's profile, giving
the group an appropriate level of headroom under the 3.5x net debt/EBITDA
covenant contained in its U.S. private placement. Net debt/EBITDA was 3.1x at
the end of Q212.

The stability and long-term nature of the satellite industry means that
significant changes in SES's risk profile are unlikely in the three- to
five-year rating horizon given. Potential industry challenges over the longer
term are primarily technological (substitution by terrestrial fibre networks or
more efficient transponder use than predicted), which could reduce demand.
Widespread satellite failure across the fleet could have negative implications
for the company's financial profile and rating, but this is mitigated by SES's
large fleet and significant unutilised transponder capacity (77% utilisation
rate as at 30 June 2012).

SES's liquidity remains healthy. SES had EUR239m of cash and cash equivalents on
its balance sheet at the end of June 2012 as well as EUR1.46bn of undrawn
committed facilities (mainly coming from its undrawn EUR1.2bn revolving credit
facility which expires in 2015). Together, this liquidity should allow SES to
cover its EUR110m of commercial paper and debt maturing in H212 and 2013.

WHAT COULD TRIGGER A RATING ACTION?

Negative: Future developments that may, individually or collectively, lead to
negative rating action include:

- The stability and long-term nature of the satellite industry makes significant
changes in SES's risk profile unlikely in the three- to five-year rating
horizon. This stable operating environment means that Fitch could tolerate
expectations of unadjusted net debt/EBITDA reaching 3.3x before considering a
negative rating action.

- Pre-dividend free cash flow margin consistently below 10% would indicate
deterioration in the business which could lead to negative rating action.

Positive: Future developments that may, individually or collectively, lead to
positive rating action include:

- SES's rating is constrained at the 'BBB' level by its current leverage policy.
While there is potential for upward migration if this policy is tightened, Fitch
has no expectation at present that this will occur.Additional information is available at www.fitchratings.com.

The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Corporate Rating Methodology', dated 8 August 2012 is
available at www.fitchratings.com.

Applicable Criteria and Related Research:
Corporate Rating Methodology

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