Moody’s pares Millicom

Moody's Investors Service said it downgraded Millicom International Cellular SA's corporate family rating to Ba2 from Ba1 and its senior unsecured long-term debt rating to Ba3 from Ba2.

The agency also lowered the CFRs and senior unsecured long-term debt ratings of Millicom's subsidiaries CT Trust (Tigo Guatemala), Telecomunicaciones Digitales, SA (Tigo Panama) and Telefonica Celular del Paraguay SAE (Telecel or Tigo Paraguay) to Ba2 from Ba1, with a stable outlook. Previously, the ratings were on review for downgrade. This concludes the review initiated on Oct. 6.

“The downgrade reflects Moody's expectation that the group's credit profile over the rating horizon, particularly regarding leverage, cash flow generation and interest coverage, will better align with metrics expected for the Ba2 rating level. The group's high capital expenditure intensity and resulting pressure on free cash flow (FCF) generation pose challenges to significant leverage reduction, despite the group's revised 2024 investment plans,” the agency said in a press release.

The stable outlook reflects a forecast that Millicom will maintain adequate liquidity while staying committed to its medium-term 2.5x net leverage target.

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