Bulletin: Orange S.A.?s Metrics Still Adequate For The Ratings After Joint Venture, Albeit With Reduced Headroom

This report does not constitute a rating action. PARIS (S&P Global Ratings) March 27, 2024--S&P Global Ratings today said that Orange S.A.'s (BBB+/Stable/A-2) new joint venture (JV) combining its operations in Spain with those of Masmovil will leave the company with reduced headroom, although metrics will remain commensurate with the ratings. We understand the JV will not be consolidated in Orange?s accounts. Based on the company's 50% ownership in the JV, we intend to proportionally consolidate the JV in Orange's metrics from 2024 onwards, because we believe that the company remains committed to operations in Spain. We also think it is likely to take control and consolidate the JV in the event of an IPO, although we acknowledge it hasn't

...March 27, 2024 This report does not constitute a rating action. PARIS (S&P Global Ratings) March 27, 2024--S&P Global Ratings today said that Orange S.A.'s (###+/Stable/A-2) new joint venture (JV) combining its operations in Spain with those of Masmovil will leave the company with reduced headroom, although metrics will remain commensurate with the ratings. We understand the JV will not be consolidated in Orange's accounts. Based on the company's 50% ownership in the JV, we intend to proportionally consolidate the JV in Orange's metrics from 2024 onwards, because we believe that the company remains committed to operations in Spain. We also think it is likely to take control and consolidate the JV in the event of an IPO, although we acknowledge it hasn't committed to do so. We estimate the impact of our pro rata consolidation on the S&P Global Ratings-adjusted leverage of about 0.2x in 2024, falling to 0.1x by 2026. The beneficial impact of the 4.4 billion proceeds Orange will receive from...

Bulletin