Moody's trims Telecom Italia

Moody's Investors Service said it downgraded all of Telecom Italia SpA’s issued or guaranteed senior unsecured debt instruments to B1 from Ba3. The agency also lowered the corporate family rating to B1 from B3 and to B1-PD from Ba3-PD the probability of default rating.

"The downgrade of Telecom Italia's ratings reflects our expectation that its leverage will remain high and its free cash flow will remain negative over the next 2 to 3 years, due to the highly competitive market conditions in Italy and the high investment needs, combined with the expected macroeconomic slowdown," said Ernesto Bisagno, a Moody's vice president, senior credit officer and lead analyst for Telecom Italia, in a press release.

"The company was already weakly positioned in the previous rating category. However, the macroeconomic environment has deteriorated since we downgraded the rating to Ba3 in March, reducing the visibility on Telecom Italia's operating performance and its expected deleveraging path," Bisagno added.

The outlook remains negative.

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