Fitch revises eir outlook to stable

Fitch Ratings said it revised eircom Holdings (Ireland) Ltd.'s outlook to stable from positive and placed its senior secured instrument rating on rating watch negative. The agency also affirmed eir's long-term issuer default rating at B+.

“The change in our outlook reflects the increasingly competitive nature of the Irish telecommunications market and our expectation that eir's revenue and EBITDA will decline in 2022 before gradually stabilizing by 2024,” Fitch said in a press release.

The company’s sale of its 49% in Fibre Networks Ireland Ltd. (FibreCo) should be completed within two months weakening eircom’s operating profile, the agency said.

“The RWN follows eir's plans to raise €765 million at the newly created FibreCo. We expect eir to use part of the proceeds from the sale and new financing to pay down existing senior secured debt issued at the holdco level. Details of the new FibreCo debt and the quantum of debt to be repaid at holdco are still unknown. Raising debt at the FibreCo level may weaken the recovery prospects of existing holdco debt and could lead to a downgrade of the existing facilities under our bespoke recovery analysis approach,” Fitch said.

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