Research Update: DKT Holdings Affirmed At 'B+' On Sale Of Norwegian Unit; Outlook Stable; TDC Debt On CreditWatch

On July 17, 2018, TDC A/S announced its intention to sell its Norwegian business to Telia Company AB for Norwegian krone (NOK) 21 billion in cash (about €2.2 billion). Although TDC has yet to specify how it will use the proceeds, we expect the company will allot a sufficient amount toward debt prepayment or network investments, offsetting the smaller footprint and scale resulting from TDC's retreat from Norway. We are therefore affirming our 'B+' long-term issuer credit rating on DKT Holdings ApS. We are placing on CreditWatch negative our 'BB-' issue rating on TDC's €3.9 billion senior secured term loan, and we are placing on CreditWatch positive our 'B+' issue rating on TDC's €1.0 billion senior unsecured notes. The stable

...+ On July 17, 2018, TDC A/S announced its intention to sell its Norwegian business to Telia Company AB for Norwegian krone (NOK) 21 billion in cash (about 2.2 billion). + Although TDC has yet to specify how it will use the proceeds, we expect the company will allot a sufficient amount toward debt prepayment or network investments, offsetting the smaller footprint and scale resulting from TDC's retreat from Norway. + We are therefore affirming our 'B+' long-term issuer credit rating on DKT Holdings ApS. + We are placing on CreditWatch negative our '##-' issue rating on TDC's 3.9 billion senior secured term loan, and we are placing on CreditWatch positive our 'B+' issue rating on TDC's 1.0 billion senior unsecured notes. + The stable outlook reflects our expectation that a stabilization of EBITDA, alongside debt prepayments from the disposal proceeds, will result in pro forma adjusted debt to EBITDA of 7.0x-7.3x and free operating cash flow (FOCF) to debt of 2%-4% in the next 12 months....

Research Update