Fitch changes Tele Columbus to stable

Fitch Ratings said it revised the outlook on Tele Columbus AG's long-term issuer default rating to stable from positive and affirmed the issuer default rating at B.

The agency also affirmed the BB-/RR2 rating on Tele Columbus' senior secured debt instruments.

The company's ratings reflect its stable business model but also high funds from operations adjusted net leverage expected at around 5.5x in 2018 to 2019 and slow deleveraging prospects, Fitch said.

“We expect Tele Columbus's customer base and revenue growth to slow down in 2018. We believe it would be a challenge to accelerate it in line with the management's mid-term ambition target of mid-to-high single-digit range,” the agency said in a news release.

“The uptake of its premium services will continue to gradually increase, but the loss of even small contracts with housing associations (HA) may exert pressure on premium revenue generating units (RGUs), and overall performance, in our view.”

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