Research Update: DKT Holdings ApS Rated 'B+' On Completion Of Leveraged Buyout Of Danish Telecom Operator TDC; Outlook Stable

On May 4, 2018, DKT Holdings ApS, owned by a consortium comprising Macquarie Infrastructure and Real Assets (MIRA) and Danish pension funds PFA, PKA, and ATP completed the leveraged buyout of a 91% stake in Danish incumbent telecom operator TDC A/S. We expect no material changes to TDC's business and strategy in the near term, but a highly leveraged new capital structure with adjusted debt to EBITDA of 7.5x–8.0x, including shareholder loans (5.5x–6.0x excluding shareholder loans), compared with 3.2x for TDC in 2017. We are therefore assigning our 'B+' long-term issuer credit rating to DKT Holdings ApS and its subsidiary DKT Finance ApS. The stable outlook reflects our expectation that further improvements in domestic operating performance will enable the company

...+ On May 4, 2018, DKT Holdings ApS, owned by a consortium comprising Macquarie Infrastructure and Real Assets (MIRA) and Danish pension funds PFA, PKA, and ATP completed the leveraged buyout of a 91% stake in Danish incumbent telecom operator TDC A/S. + We expect no material changes to TDC's business and strategy in the near term, but a highly leveraged new capital structure with adjusted debt to EBITDA of 7.5x¡8.0x, including shareholder loans (5.5x¡6.0x excluding shareholder loans), compared with 3.2x for TDC in 2017. + We are therefore assigning our 'B+' long-term issuer credit rating to DKT Holdings ApS and its subsidiary DKT Finance ApS. + The stable outlook reflects our expectation that further improvements in domestic operating performance will enable the company to stabilize its EBITDA, resulting in adjusted debt to EBITDA of 7.5x¡7.8x and free operating cash flow to debt of 3%-4% in 2018....

Research Update