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S&P lowers Axiata Group
S&P said it lowered its Axiata Group Bhd.’s issuer rating to BBB from BBB+ and the ratings on the company's senior unsecured notes and sukuk to BBB. The agency removed the ratings from CreditWatch, where it had placed them with negative implications on April 22.
Axiata's earnings quality will likely weaken as the merger between its Malaysian operations (Celcom Axiata Bhd.) and that of Telenor ASA nears completion. Additionally, S&P noted Axiata's recent acquisitions will push its debt to EBITDA to 2.7x-2.8x in 2023, from 2.2x in 2021.
“Together, these factors result in a weakened credit profile for the Malaysia-based telecommunications operator,” S&P said in a press release. “We expect Axiata's debt-to-EBITDA ratio to remain 2.8x-2.9x even in 2024, rising from the recent spate of largely debt-funded acquisitions.”
The outlook is stable.
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