Bulletin: New Zealand Chorus' Higher Leverage Should Self-Correct

MELBOURNE (S&P Global Ratings) Feb. 22, 2021--S&P Global Ratings said today that New Zealand-based telecommunications provider Chorus Ltd.'s (BBB/Stable/--) increase in leverage is expected to be temporary. We project the company's adjusted debt-to-EBITDA ratio will remain below our downgrade trigger of 4.25x for the rating in the fiscal year ending June 2021. Chorus' ratio of net debt-to-EBITDA (company's measure) increased to about 4.37x in the fiscal first half ended Dec. 31, 2020, versus 4.1x in fiscal 2020. This higher leverage is mainly due to timing differences, driven by ultra-fast broadband (UFB2) rollout being ahead of schedule compared with funding payments from Crown Infrastructure Partners (CIP, a New Zealand government-owned entity), increased investment in installations, and one-off impact of retail service provider

...February 21, 2021 MELBOURNE (S&P Global Ratings) Feb. 22, 2021--S&P Global Ratings said today that New Zealand-based telecommunications provider Chorus Ltd.'s (###/Stable/--) increase in leverage is expected to be temporary. We project the company's adjusted debt-to-EBITDA ratio will remain below our downgrade trigger of 4.25x for the rating in the fiscal year ending June 2021. Chorus' ratio of net debt-to-EBITDA (company's measure) increased to about 4.37x in the fiscal first half ended Dec. 31, 2020, versus 4.1x in fiscal 2020. This higher leverage is mainly due to timing differences, driven by ultra-fast broadband (UFB2) rollout being ahead of schedule compared with funding payments from Crown Infrastructure Partners (CIP, a New Zealand government-owned entity), increased investment in installations, and one-off impact of retail service provider payment. Chorus maintains its underlying EBITDA forecast for fiscal 2021 of NZ$640 million-NZ$660 million, although at the lower end of the...

Bulletin