Fitch upgrades eircom, debt

Fitch Ratings said it upgraded eircom Holdings (Ireland) Ltd.’s long-term issuer default rating to B from B- and assigned a stable outlook.

At the same time, the agency upgraded the company's secured bank debt and the 9¼% senior secured bonds due 2020 to B+ from B.

Fitch said the upgrade reflects its view that eircom has delivered the planned transformation of its operations; that revenues look increasingly likely to stabilize and that cost initiatives will improve operating cash flows.

While eircom's leveraged balance sheet is unusual for an incumbent telecom, the business transformation and stabilizing revenue outlook is a significant achievement in a sector where top-line declines and margin pressure remain a risk, the agency said.

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