Madrid, November 07, 2016 -- Moody's Investors Service (Moody's) has today downgraded the long-term senior unsecured ratings of leading global integrated telecommunications provider Telefonica S.A. (Telefonica) and its guaranteed subsidiaries to Baa3 from Baa2, the preferred stock ratings to Ba2 from Ba1, and the short-term ratings to Prime-3 from Prime-2. These rating actions follow Telefonica's recent decision to revise its financial strategy such that it is now unlikely to meet the previously stated deleveraging targets by December 2017. The revised financial strategy includes organic deleveraging targets, such as growing free cash flow generation and a reduction of dividend payments. Additionally inorganic measures or asset sales remain available but execution will be de-risked and based on strategic plus value creation merits. The outlook on the ratings is stable.
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