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Analysts welcome Portugal Telecom dividend cut and refinancing

Moody’s has welcomed Portugal Telecom’s decision to cut its dividend to shareholders by half and an extension of its refinancing agreement. The ratings agency said that both moves by the telco, which operates the Meo IPTV service, alleviate financial risk and support its effort to reduce debt.

“Moody’s notes that the dividend cut and refinancing extension, together with the completed extension of Portugal Telecom’s existing €800 million syndicated bank loan with all international banks, effectively pre-fund the company’s refinancing needs through June 2016. As a result, the company will not need to access the debt markets for refinancing in the medium term.”