Giralda Holding Conexion, S.L.U.

The stable outlook reflects our expectation that Konecta's market-leading position in Spanish-speaking countries and good service capability will enable it to absorb the impact of COVID-19 in 2020. Specifically, we forecast that Konecta's adjusted debt-to-EBITDA ratio will remain below 5.0x, while adjusted EBITDA margins will remain above 10%. We could lower the rating if growth headwinds in Spain and Latin America result in a continued revenue decline, or if high restructuring costs or operation missteps compress EBITDA margins to below 10%. We could also lower the rating if the company adopts a more aggressive financial policy and maintains adjusted debt to EBITDA above 5x. Additionally, the rating could be lowered if Intermediate Capital Group (ICG) or an affiliate takes a

...S&P Global Ratings expects Giralda Holding Conexion, S.L.U.'s (Konecta's) credit metrics will remain commensurate with the current ratings in 2020, despite the COVID-19 outbreak, supported by sufficient liquidity and rating headroom. Our base case assumes that, despite our expectation of a weaker 2020 performance due to the pandemic, there is sufficient headroom under the current rating to absorb the negative impact of COVID-19. As a result, we still anticipate leverage remaining below 5.0x and S&P Global Ratings-adjusted EBITDA margins sustained above 10%. Our assumptions take into account Konecta's measures to maintain operations, amid government initiatives that have been implemented across the countries in which the company operates. These measures include moving a large proportion of employees to remote working, in order to continue providing services to clients; and implementing social-distancing measures at the sites which are still operating. S&P Global Ratings acknowledges a high...

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