Fitch changes MTN Group view to negative

Fitch Ratings said it revised the outlook on MTN Group Ltd.’s long-term foreign-currency issuer default rating to negative from stable and affirmed the rating at BBB-.

Fitch said the negative outlook reflects the deterioration in the operating environment, regulatory pressures in the Nigerian market, weaker free cash-flow generation and the increasing leverage of the South African operations (including the group holding companies).

The FX mismatch between net debt and cash flow could lead to higher leverage if the U.S. dollar strengthens.

The sovereign ratings of MTN's two main countries of operations have been under pressure, the agency said. South Africa (BBB-/negative) was downgraded in December 2015 followed by a change to negative outlook in November 2016, while Nigeria (B+/stable) was downgraded in June 2016. MTN's rating is constrained by the South African sovereign rating.

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