Fitch downgrades eircom

Fitch Ratings said it affirmed eircom Holdings (Ireland) Ltd.'s long-term issuer default rating at B+ with a stable outlook.

Fitch also said it downgraded the senior secured rating to BB- from BB and removed it from Rating Watch negative following the finalization of the capital structure with the May refinancing and first amend-and-extend transaction.

The agency said it views the refinancing transaction as leverage neutral.

Fitch said it understands any new funds raised will be applied to the repayment of the outstanding more expensive debt.

The company continues to optimize its capital structure through the refinancing of the term loan B and Fitch said it views the associated reduction of the interest expense and extension of maturities as positive.

The agency also said it converted the expected senior secured rating of BB- to final on the newly issued €750 million 3½% senior secured notes due 2026 and affirmed the expected senior secured rating of BB- on the term loan B tranches due 2024 and 2026.

The expected BB- senior secured rating and recovery rating of RR3 reflects the pari passu ranking of the new loans and notes with all present and future senior secured obligations, Fitch said.

The agency said it expects the company to deleveraged based on operational improvements achieved in the past year and successful cost-cutting, which supports profitability and ongoing cash flow generation.

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