Moody's downgrades Telecom Italia outlook to negative, affirms rating

News General Italy 11 JUL 2019
Moody's downgrades Telecom Italia outlook to negative, affirms rating
Ratings agency Moody’s has downgraded Telecom Italia's outlook from stable to negative while affirming its ‘BA1’ rating. In a statement, Moody’s said the change in outlook to negative reflected its expectation that the operator will continue to operate in a very competitive environment and with sustained high leverage in spite of a strong commitment to reduce debt. Moody’s predicted that the company’s net debt/EBITDA will remain close to 4.0x in 2019 and above 3.5x in 2020, adding that debt-reduction measures may not be enough to bring leverage below the 3.5x threshold for the rating category until at least 2021.

However, the ratings company said it did expect gradual improvements in the company's operating performance as revenue trends could start improving in 2020. Above all, current discussions to potentially merge Telecom Italia's fixed network with Open Fiber, the announced network sharing agreement with Vodafone Italia and other possible measures to improve the company’s credit strength are described as "positive" by Moody's, reflecting the management's determination and execution capabilities.

Categories:

General

Companies:

TIM,  Telecom Italia,  TIM Brasil

Countries:

Italy

Tags:

Production planning & operations, Market research

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