Bulletin: Deutsche Telekom's T-Mobile-Sprint Merger Still Not Closed Despite Favorable Ruling

PARIS (S&P Global Ratings) Feb. 12, 2020--S&P Global Ratings said today that, despite the recent ruling in favor of T-Mobile U.S.' (TMUS') takeover of Sprint Corp., the transaction's timing to completion remains uncertain. We understand that further appeals against the deal remain legally possible, and we think the parties might want to renegotiate some of the transaction parameters. As such, our credit assessment of Deutsche Telekom AG (DT; BBB+/Watch Neg/A-2), TMUS' parent, remains unchanged. We had put the ratings on DT on CreditWatch with negative implications in April 2018 when the company announced that TMUS had agreed to acquire Sprint in a stock-for-stock transaction. We continue to consider likely a one-notch downgrade of DT if the acquisition moves forward, mainly

...February 12, 2020 PARIS (S&P Global Ratings) Feb. 12, 2020--S&P Global Ratings said today that, despite the recent ruling in favor of T-Mobile U.S.' (TMUS') takeover of Sprint Corp., the transaction's timing to completion remains uncertain. We understand that further appeals against the deal remain legally possible, and we think the parties might want to renegotiate some of the transaction parameters. As such, our credit assessment of Deutsche Telekom AG (DT; ###+/Watch Neg/A-2), TMUS' parent, remains unchanged. We had put the ratings on DT on CreditWatch with negative implications in April 2018 when the company announced that TMUS had agreed to acquire Sprint in a stock-for-stock transaction. We continue to consider likely a one-notch downgrade of DT if the acquisition moves forward, mainly due to substantial integration costs that could weaken DT's free operating cash flow and push S&P Global Ratings-adjusted leverage materially over 3.5x through 2022 assuming a closing this year. That...

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