This report does not constitute a rating action. MELBOURNE (S&P Global Ratings) Feb. 28, 2024-- Spark New Zealand Ltd. can cope with a temporary spike in leverage. We expect leverage to contract by fiscal year-end (June 30, 2024), due to continued profitability and stronger second-half free operating cash flow. The telecom operator's adjusted debt-to-EBITDA of about 1.79x is above its policy level of 1.7x. If leverage remains at this level, it will test our downward ratings trigger of an adjusted debt-to-EBITDA ratio of about 1.7x. Nevertheless, we believe several factors will allow Spark to reduce debt levels and deleverage in the second half. These include continued growth in its workhorse mobile business, lower capital expenditure, more disciplined control of working
