Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction - S&P Global Ratings’ Credit Research

Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction

Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction - S&P Global Ratings’ Credit Research
Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction
Published Apr 01, 2020
5 pages (2546 words) — Published Apr 01, 2020
Price US$ 150.00  |  Buy this Report Now

About This Report

  
Abstract:

Spanish incumbent telecom operator Telefonica S.A.'s adjusted leverage increased in 2019, contrasting with our expectation for improving credit metrics helped by asset disposals and one-off tax refunds. Market conditions in Spain and some other markets, as well as currency-related stress in its Latin American operations, could make it challenging for the company to reduce adjusted leverage through organic EBITDA growth and discretionary cash flow (DCF) in the near-term. S&P Global Ratings is revising the outlook on Telefonica to negative from stable and affirming our 'BBB' long-term issuer credit rating on the company. The negative outlook reflects the risk of a downgrade if we no longer expect Telefonica will make significant progress in reducing its leverage in 2020 as an intermediate

  
Brief Excerpt:

...- Spanish incumbent telecom operator Telefonica S.A.'s adjusted leverage increased in 2019, contrasting with our expectation for improving credit metrics helped by asset disposals and one-off tax refunds. - Market conditions in Spain and some other markets, as well as currency-related stress in its Latin American operations, could make it challenging for the company to reduce adjusted leverage through organic EBITDA growth and discretionary cash flow (DCF) in the near-term. - S&P Global Ratings is revising the outlook on Telefonica to negative from stable and affirming our '###' long-term issuer credit rating on the company. - The negative outlook reflects the risk of a downgrade if we no longer expect Telefonica will make significant progress in reducing its leverage in 2020 as an intermediate step for returning to comfortably below maximum adjusted debt to EBITDA of 3.25x in 2021 (derived from about 3.5x using proportionate consolidation), in addition to maintaining sustainable adjusted...

  
Report Type:

Ratings Action

Ticker
TEF@SM
Issuer
Telefonica S.A.
GICS
Integrated Telecommunication Services (50101020)
Sector
Global Issuers, Public Finance, Structured Finance
Country
Spain
Region
United States
Format:
PDF Adobe Acrobat
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction" Apr 01, 2020. Alacra Store. Nov 06, 2026. <http://www.alacrastore.com/s-and-p-credit-research/Outlook-On-Spanish-Telecom-Operator-Telefonica-Revised-To-Negative-On-Muted-Prospects-For-Leverage-Reduction-2405121>
  
APA:
S&P Global Ratings’ Credit Research. (). Outlook On Spanish Telecom Operator Telefonica Revised To Negative On Muted Prospects For Leverage Reduction Apr 01, 2020. New York, NY: Alacra Store. Retrieved Nov 06, 2026 from <http://www.alacrastore.com/s-and-p-credit-research/Outlook-On-Spanish-Telecom-Operator-Telefonica-Revised-To-Negative-On-Muted-Prospects-For-Leverage-Reduction-2405121>
  
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