Moody’s lowers Telenet

Moody's Investors Service said it downgraded Telenet Group Holding NV's corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD. Concurrently, Moody's lowered to B1 from Ba3 the instrument ratings on the backed senior secured bank credit facilities issued by Telenet International Finance Sarl and Telenet Financing USD LLC as well as on the senior secured notes issued by Telenet Finance Luxembourg Notes Sarl.

The agency said it also revised the outlook on all entities to stable from negative.

“Today's downgrade is prompted by Telenet's announcement that it had up-streamed a special dividend of €1.19 billion to its parent Liberty Global Holding Belgium BV (a subsidiary of Liberty Global plc, Ba3 stable) in Q4 2023. The shareholder distribution was funded through the issuance of a €890 million sustainability-linked term loan, as well as €300 million of cash on balance sheet,” Moody’s said in a press release.

The agency said it estimates Telenet's Moody's-adjusted debt/EBITDA rose by 0.7x to around 5.4x and its Moody's-adjusted net debt/EBITDA by 0.9x to around 4.8x. “These levels are above the thresholds for the previous Ba3 rating.”

The revised outlook reflects a forecast that the company's EBITDA will decline in the mid-single digit percentages over 2024 before a broad stabilization in 2025. “This is likely to lead to Moody's-adjusted leverage and Moody's-adjusted CFO/debt remaining well within the thresholds set for the current B1 rating,” Moody’s said.

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