Cable And Telecom Firm VodafoneZiggo Downgraded To 'B+' On Sustained High Leverage And Dividends; Outlook Stable

We believe VodafoneZiggo's high shareholder returns and high vendor financing to fund operating and capital expenditure will keep adjusted leverage sustainably above 6x, comparing unfavorably with peers. Although we expect operational resilience, we believe that aggressive shareholder returns, the challenging competitive and regulatory environment, and sizable integration costs will prevent sufficient EBITDA growth to reduce leverage, despite the joint venture's ambitious synergies plan. We are therefore lowering our rating on VodafoneZiggo to 'B+' from 'BB-'. The stable outlook reflects our view that free operating cash flow adjusted for the vendor financing program should remain positive despite market competition and regulatory pressures. We continue to anticipate a moderate degree of support to VodafoneZiggo from parents Liberty Global and Vodafone. PARIS (S&P

...+ We believe VodafoneZiggo's high shareholder returns and high vendor financing to fund operating and capital expenditure will keep adjusted leverage sustainably above 6x, comparing unfavorably with peers. + Although we expect operational resilience, we believe that aggressive shareholder returns, the challenging competitive and regulatory environment, and sizable integration costs will prevent sufficient EBITDA growth to reduce leverage, despite the joint venture's ambitious synergies plan. + We are therefore lowering our rating on VodafoneZiggo to 'B+' from '##-'. + The stable outlook reflects our view that free operating cash flow adjusted for the vendor financing program should remain positive despite market competition and regulatory pressures. + We continue to anticipate a moderate degree of support to VodafoneZiggo from parents Liberty Global and Vodafone. PARIS (S&P Global Ratings) Jan. 31, 2019--S&P Global Ratings said today that it took the rating action outlined above. The downgrade...

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