Mobily announced that it had reached a final agreement with the remaining Saudi banks, international banks and export credit agencies (ECAs) to waive the default related to the breach of leverage covenant on the ECA facilities and other remaining facilities. This effectively means Mobily has now reached an agreement with all of its creditors to waive all defaults under all its debt facilities. The company had announced on 29 December 2015 that it had reached an agreement with the majority of its Saudi creditors to waive the breach of leverage covenant under several of its local facilities.   Our view: This is a positive development for Mobily and is in line with our view that a default was highly unlikely. The waiver of the default has no impact on our valuation and forecasts; however, it irons out an important overhang on the stock and will likely lead to an improvement in market sentiment towards Mobily. We had previously argued that a default event would be too risky for the Saudi banking system, especially at the current economic juncture, and that it was in the best interest of both Mobily and its lenders to agree on a reset of the covenant. At the current market price, we see the stock as fairly valued and reiterate our Neutral rating, but we keep an eye on further positive developments regarding the company’s restructuring and the potential tower sale, as well as more clarity and guidance from management on the outlook. (Company disclosure, Omar Maher)   Mobily: SAR28.49 as of 16 May 2016, Rating: Neutral, FV: SAR30.39 per share, MCap: USD5,850 million, EEC AB / 7020.SE