Obbligazioni societarie HIGH YIELD e oltre, verso frontiere inesplorate - Vol. 2 (17 lettori)
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salice02
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Fitch Downgrades Telecom Italia to 'BB'; Outlook Negative
Fri 18 Mar, 2022 - 13:24 ET
Fitch Ratings - Milan - 18 Mar 2022: Fitch Ratings has downgraded Rome-based Telecom Italia S.p.A's (TI) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB' from 'BB+'. The Outlook on the IDR is Negative. A full list of rating actions is available below.
The rating downgrade reflects greater-than-expected erosion of EBITDA, higher costs at a time of significant investment outlay and sustained negative free cashflow (FCF). As a result, we expect TI's funds from operations (FFO) net leverage to exceed its downgrade threshold of 4.3x in 2022 and remain sustainably above this level for the medium term. The Negative Outlook reflects our view that improvements in EBITDA may not occur sufficiently fast to maintain the 'BB' rating.
TI's new strategy to separate its fixed, local access network assets from its current operating scope creates some short-term uncertainty to the rating. While this may not necessarily be negative for TI's rating and credit profile, the impact will be dependent on the transaction structure and extent of any subsequent reallocation of debt. Fitch has based TI's rating on its current operating scope including fixed network assets.
KEY RATING DRIVERS
Significant EBITDA and Cost Pressures: TI's total organic EBITDA (before leases) declined 12% in 2021 to EUR6.2 billion, driven primarily by its domestic business. We expect this to decline further in 2022 by another 12% before gradually improving from 2023. The extent of decline is much sharper than we anticipated and due to competitive pressures, continued loss of high-margin revenue from legacy products, the impact of new laws on retail contracts, stricter-than-expected rules on government support vouchers and content costs that are not being matched by sufficient revenue improvements. In addition, higher-than-expected one-off costs have further weakened cashflow.
Competition and Cost Reduction Uncertainties: We expect competitive pressures in the mobile and fixed wholesale segments will continue over the next two to three years as rivals Iliad Italy builds scale and Open Fiber continues the build-out of its network. The pace at which TI is able to offset this impact through cost reduction is uncertain and dependent on strong execution. Its new management expect to reduce their addressable cost base in Italy of EUR4.8 billion by 15% in 2024. This equates to about 6pp in EBITDA margin and if fully achieved and retained, would represent an upside to Fitch's base case forecasts.
Leverage Increasing, Negative FCF: Fitch's base case forecasts assume that TI's FFO net leverage will increase to about 5.4x at end-2022 from 4.3x at end-2021 and then gradually decline to around 5.2x by 2024. We expect TI's FCF will remain negative for at least three years. Its leverage is above the downgrade threshold and underlines the Negative Outlook. The increase in leverage is driven by EBITDA erosion, higher interest and tax costs, and EUR2.1 billion of spectrum costs in 2022. We expect improvements in leverage, driven by lower content costs as TI unwinds a contract with DAZN and by operational cost reduction.
Fitch Downgrades Telecom Italia to 'BB'; Outlook Negative
Fri 18 Mar, 2022 - 13:24 ET
Fitch Ratings - Milan - 18 Mar 2022: Fitch Ratings has downgraded Rome-based Telecom Italia S.p.A's (TI) Long-Term Issuer Default Rating (IDR) and senior unsecured rating to 'BB' from 'BB+'. The Outlook on the IDR is Negative. A full list of rating actions is available below.
The rating downgrade reflects greater-than-expected erosion of EBITDA, higher costs at a time of significant investment outlay and sustained negative free cashflow (FCF). As a result, we expect TI's funds from operations (FFO) net leverage to exceed its downgrade threshold of 4.3x in 2022 and remain sustainably above this level for the medium term. The Negative Outlook reflects our view that improvements in EBITDA may not occur sufficiently fast to maintain the 'BB' rating.
TI's new strategy to separate its fixed, local access network assets from its current operating scope creates some short-term uncertainty to the rating. While this may not necessarily be negative for TI's rating and credit profile, the impact will be dependent on the transaction structure and extent of any subsequent reallocation of debt. Fitch has based TI's rating on its current operating scope including fixed network assets.
KEY RATING DRIVERS
Significant EBITDA and Cost Pressures: TI's total organic EBITDA (before leases) declined 12% in 2021 to EUR6.2 billion, driven primarily by its domestic business. We expect this to decline further in 2022 by another 12% before gradually improving from 2023. The extent of decline is much sharper than we anticipated and due to competitive pressures, continued loss of high-margin revenue from legacy products, the impact of new laws on retail contracts, stricter-than-expected rules on government support vouchers and content costs that are not being matched by sufficient revenue improvements. In addition, higher-than-expected one-off costs have further weakened cashflow.
Competition and Cost Reduction Uncertainties: We expect competitive pressures in the mobile and fixed wholesale segments will continue over the next two to three years as rivals Iliad Italy builds scale and Open Fiber continues the build-out of its network. The pace at which TI is able to offset this impact through cost reduction is uncertain and dependent on strong execution. Its new management expect to reduce their addressable cost base in Italy of EUR4.8 billion by 15% in 2024. This equates to about 6pp in EBITDA margin and if fully achieved and retained, would represent an upside to Fitch's base case forecasts.
Leverage Increasing, Negative FCF: Fitch's base case forecasts assume that TI's FFO net leverage will increase to about 5.4x at end-2022 from 4.3x at end-2021 and then gradually decline to around 5.2x by 2024. We expect TI's FCF will remain negative for at least three years. Its leverage is above the downgrade threshold and underlines the Negative Outlook. The increase in leverage is driven by EBITDA erosion, higher interest and tax costs, and EUR2.1 billion of spectrum costs in 2022. We expect improvements in leverage, driven by lower content costs as TI unwinds a contract with DAZN and by operational cost reduction.
iguanito
Forumer storico
qual'è l'isin?
arkymede74
Forumer storico
fedro10
è la somma che fa il totale...
immagino questo
International bonds: Kazakhstan Temir Zholy, 3.638% 20jun2022, CHF (CH0246199050)
Issue Information International bonds Kazakhstan Temir Zholy, 3.638% 20jun2022, CHF. Issue, Issuer, Yield, Prices, Payments, Analytical Comments, Ratings
cbonds.com
iguanito
Forumer storico
Bombardier Completes Partial Redemption of $200,000,000 of its 7.500% Senior Notes due 2024 and $200,000,000 of its 7.500% Senior Notes due 2025
Bombardier Completes Partial Redemption of $200,000,000 of its 7.500% Senior Notes due 2024 and $200,000,000 of its 7.500% Senior Notes due 2025
bombardier.com
Non capisco perchè la negoziazione dei due bond sia ancora sospesa