Moody’s assigns B1 to RCS & RDS notes

Moody’s Investors Service said it affirmed the B1 corporate family and the B1-PD probability of default rating of Digi Communications NV, the parent company of RCS & RDS SA, and assigned a B1 rating to the proposed €800 million senior secured notes (split into two tranches, due 2025 and 2028 respectively) to be issued by RCS & RDS. The outlook is stable.

Part of the proceeds will be used to redeem the €550 million of senior notes due 2023. Moody’s will withdraw the rating on the existing notes upon repayment. Digi Group will use the remaining proceeds to repay €163 million of drawdowns under its senior facilities, to cover €33 million of accrued interest and early prepayment fees and transaction costs and €54 million for corporate purposes.

“The ratings affirmation reflects the (1) the company’s track record of solid operating performance; (2) its strong market position in Romania and Hungary benefitting from superior network quality; (3) its success as a challenger in the Spanish market resulting in accelerating revenue growth; and (4) its solid financial profile with Moody’s adjusted leverage to remain below 3.5x in 2020-21,” said Agustin Alberti, a Moody’s vice president, senior analyst and lead analyst for Digi, in a press release.

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