RCS&RDS has received positive ratings from financial assessment agencies Standard & Poor’s and Moody’s. S&P assigned a ‘B’ long-term corporate credit rating to the cable company, placing it on CreditWatch with positive implications. S&P also assigned a ‘B+’ rating to the firm’s proposed USD 200 million bond. “The rating on RCS&RDS is constrained by our view of increasing competition in its core markets of operation, Romania and Hungary, as market players are focused on competing on bundled offers to attract customers,” said S&P’s credit analyst Michael O’Brien.
“The ratings are also constrained by RCS&RDS’s weak free cash flow generation to date, given its high level of network investments. In addition, it faces the need to refinance significant amounts of debt compared with what we consider a relatively low, but increasing, level of free cash flow generation over the next three years,” say S&P analysts.
Moody’s Investors Service assigned new corporate family (CFR) and probability of default (PDR) ratings of Ba3 to RCS&RDS with stable outlook. Moody’s also assigned a (P)Ba3 to senior unsecured notes being issued by the firm. “The rating is constrained by the company’s relatively smaller size compared to its similarly-rated peer group and its exposure to emerging market economies,” said Moody’s.