S&P boosts Videotron to investment grade

S&P said it raised its issuer and issue-level ratings on Videotron Ltee and its unsecured debt to BBB- from BB+.

“Videotron exited 2023 with leverage around 3.5x, pro forma the Freedom Mobile acquisition, in line with our previous expectation. We expect Videotron to end 2025 closer to 3.2x as we expect the company to continue repaying debt. We believe that Videotron can achieve leverage improvement despite what we assume will be a more competitive environment that continues into 2024 from the second half of 2023,” S&P said in a press release.

The agency said it expects the company to manage earnings and generate significant free cash flow amid increasing market competitiveness by hunting growth in national wireless while preserving profitability at its Quebec operations.

The outlook is stable.

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