Research Update: Telenet Group Holding N.V. 'BB-' Ratings Affirmed On Expected Partnership With Fluvius; Outlook Stable

We expect that Telenet Group Holding N.V.'s (Telenet's) partnership with Fluvius System Operator (Fluvius) will have a mixed effect on its credit metrics. We forecast that leverage will somewhat improve and free cash flow will be depressed during the period that the newly created network company (netco) upgrades its network to fiber to the home (FTTH). Despite the reduced cash flows, we think the company has demonstrated a prudent financial policy as evidenced by its dividend cut, which will support the funding of the network, as well as retaining cash from its mobile telecommunications tower business sale to use for future investments in the network. We therefore affirmed our 'BB-' issuer and issue ratings on Telenet and its debt. The

...- We expect that Telenet Group Holding N.V.'s (Telenet's) partnership with Fluvius System Operator (Fluvius) will have a mixed effect on its credit metrics. We forecast that leverage will somewhat improve and free cash flow will be depressed during the period that the newly created network company (netco) upgrades its network to fiber to the home (FTTH). - Despite the reduced cash flows, we think the company has demonstrated a prudent financial policy as evidenced by its dividend cut, which will support the funding of the network, as well as retaining cash from its mobile telecommunications tower business sale to use for future investments in the network. - We therefore affirmed our '##-' issuer and issue ratings on Telenet and its debt. - The stable outlook reflects our view that Telenet will demonstrate about 1% organic EBITDA growth in 2022, thanks to the continued solid performance of its broadband segment and price increases. This should translate to S&P Global Ratings-adjusted leverage...

Research Update