S&P downgraded outlook rating of TEF O2 CR during yesterday’s session from stable to negative due to similar downgrade of its mother company Telefonica SA. Downgrade was initiated in whole telco sector in Western Europe as competition increased, regulations are enforeced and financial situation could deteriorate.
Our view:
We see the news as slightly negative for TEF O2 CR, although this downgrade was principally initiated by Telefonica SA position and putting its subsidiaries in line with it. TEF O2 CR’s rating itself might be downgraded later on given the situation depicted materialize.