S&P drops PostNL rating

S&P said it downgraded PostNL to BBB from BBB+.

“We downgraded PostNL because of its constrained excess cash flow generation capacity in the medium term resulting in the company's financial risk profile staying in our modest category, which is commensurate with a BBB rating,” said S&P in a news release.

S&P said the company needs a large cash investment to expand and renovate network infrastructure and in working capital. The expenses along with a policy of shareholder dividend will challenge PostNL to reduce debt, S&P said.

The outlook is stable.

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