Moody’s revises Inmarsat to negative

Moody's Investors Service said it affirmed Inmarsat plc’s corporate family at Ba1 and probability of default rating at Ba1-PD, as well as the Ba2 rating of the $1 billion senior notes due 2022 issued by Inmarsat Finance plc, which are unconditionally guaranteed by Inmarsat.

The outlook was revised to negative from stable.

"The negative outlook on Inmarsat's ratings recognizes the strong likelihood that Inmarsat's leverage and free cash flow will be weak vis-à-vis our expectations for a Ba1 rating due to its sizeable capex program in 2016-2018. Whilst noting the commercial case for Inmarsat's Aviation connectivity and Inmarsat-6 fleet projects, the company's modest retained cash flow after payment of dividends suggests that these investments will be partly funded through incremental debt which will further weaken the company's financial metrics," Alejandro Nunez, Moody's vice president, senior analyst and lead analyst for the issuer, said in a news release.

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