Moody’s revises Digi to stable

Moody's Investors Service said it changed the outlook on Digi Communications NV, the parent company for RCS & RDS SA, to stable from positive.

Concurrently, the agency affirmed the company’s B1 corporate family rating, B1-PD probability of default rating and B1 senior secured debt rating.

Moody's said the outlook change reflects: (a) The increase in the leverage at Digi due to the recent debt-financed acquisition of Invitel Tavkozlesi Zrt (Hungarian subsidiary of telecom provider Invitel Group) for €135.4 million, although scheduled debt amortizations and EBITDA growth will likely support future de-leveraging absent further debt financed acquisitions or material shareholder returns; (b) the expectation of negative or marginally positive free cash flow generation in 2018 and the lack of publicly defined medium-term financial policy leverage ratio target; as well as (c) the prolonged uncertainty associated with the resolution of the bribery and money laundering accusations facing Digi and some of its senior management representatives.

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