Research Update: Telecom Operator DKT Holdings Ratings Placed On Creditwatch Negative On Refinancing Risk

Danish telecommunications operator TDC Holding's holding company DKT Finance ApS has Danish krone (DKK) 10.4 billion high-yield bonds (CCC+) due in less than 12 months in June 2023. In addition, we anticipate the company will use existing internal resources to repay the £425 million unsecured notes (B+) due March 2023 and issued by TDC Holding. Although the company is looking for funding options, without any concrete refinancing in place for the subordinated high-yield bond, we currently forecast that ultimate parent DKT Holdings ApS' liquidity sources will not cover liquidity uses in the next 12 months, leading to a potential liquidity shortfall. We therefore placed our 'B' long-term issuer credit rating on DKT Holdings on CreditWatch negative. The CreditWatch negative reflects

...- Danish telecommunications operator TDC Holding's holding company DKT Finance ApS has Danish krone (DKK) 10.4 billion high-yield bonds (###+) due in less than 12 months in June 2023. - In addition, we anticipate the company will use existing internal resources to repay the ú425 million unsecured notes (B+) due March 2023 and issued by TDC Holding. - Although the company is looking for funding options, without any concrete refinancing in place for the subordinated high-yield bond, we currently forecast that ultimate parent DKT Holdings ApS' liquidity sources will not cover liquidity uses in the next 12 months, leading to a potential liquidity shortfall. - We therefore placed our 'B' long-term issuer credit rating on DKT Holdings on CreditWatch negative. - The CreditWatch negative reflects the possibility that we could lower the rating on DKT Holdings by at least one notch over the next few months if DKT Finance is unable to refinance its subordinated debt due June 2023....

Research Update