Fitch rates eircom debt BB

Fitch Ratings said it affirmed eircom Holdings (Ireland) Ltd.'s long-term issuer default rating at B+ with a stable outlook, as well as their existing senior secured rating at BB.

Fitch also said it has assigned an expected senior secured rating of BB to the company's upcoming €850 million debt issue, comprising both loans and notes, due in 2026.

The expected rating is aligned with the current senior secured rating, reflecting the pari passu ranking of the new loans and notes with all present and future senior secured obligations, the agency said, as well as the proposed terms being materially in line with existing secured debt.

The proceeds will be used to refinance its existing €700 million bond due in May 2022, as well as finance a special dividend of €300 million.

Fitch said it expect eircom's proposed refinancing of the €700 million bond due 2022 and subsequent payment of a €300 million special dividend to erode headroom.

The agency said it recognizes the operational improvements achieved during the first half of 2019 with successful cost-cutting supporting profitability and cash flow generation so that leverage pressures will likely be temporary.

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