S&P lifts eircom, facilities

S&P said it raised its long-term corporate credit rating on eircom Holdings (Ireland) Ltd. to B+ from B.

The outlook is stable.

At the same time, the agency upgraded its issue ratings on the senior secured loan and revolving credit facility issued by eir's financing subsidiary eircom Finco Sarl and senior secured notes issued by another financing subsidiary eircom Finance DAC to B+ from B. The recovery rating on the debt is unchanged at 3, indicating an expectation of meaningful recovery prospects in the event of default, in the lower half of the 50%-70% range.

S&P also assigned B+ long-term corporate credit ratings to eircom Finco and eircom Finance DAC, in line with the rating on eir.

“The upgrade follows eir's continued positive performance in calendar year 2016 and our view that its improving EBITDA and free operating cash flow (FOCF) generation sustainably support deleveraging to about 5x S&P Global Ratings-adjusted debt to EBITDA,” the agency said in a news release.

Eir reported solid revenue growth of 3.6% in the financial year (FY) ending June 2016, followed by underlying revenue growth (before a cut to the mobile termination rate and foreign exchange impacts) of about 2% year-on-year in the first half of FY2017.

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