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Fitch Affirms Millicom at 'BB+'; Outlook Stable

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Note -- this news article is more than a year old.

Fitch Ratings has affirmed the long term foreign and local currency Issuer Default Ratings (IDRs) of Millicom International Cellular, S.A. (MIC) at 'BB ' with a Stable Outlook. Fitch has also affirmed MIC's senior unsecured debt at 'BB .'

MIC's ratings reflect the company's geographical diversification, strong brand recognition and network quality, all of which have contributed to its leading market positions in key markets, steady subscriber growth, and solid operational cash flow generation. In addition, the rapid uptake in subscribers' data usage, as well as MIC's ongoing expansion into the under-penetrated fixed-line services bode well for its medium- to long-term revenue growth.

Despite these diversification benefits, MIC's ratings are constrained by the company's presence in countries in Latin America and Africa with low sovereign ratings. The ratings are also tempered by the recent increase in the company's financial leverage due to M&A activities, historically high shareholder returns, and debt allocation between subsidiaries and the holding company.

While operational fundamentals and key financial metrics are stable, the ongoing investigation regarding the improper payment on behalf of Tigo Guatemala is credit negative. The timeline or the magnitude of the potential impact stemming from this issue remains largely uncertain at this time. Fitch will closely monitor the situation and take immediate action, if necessary, when details become available.

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