Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable - S&P Global Ratings’ Credit Research

Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable

Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable - S&P Global Ratings’ Credit Research
Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable
Published Jun 29, 2023
5 pages (2537 words) — Published Jun 29, 2023
Price US$ 150.00  |  Buy this Report Now

About This Report

  
Abstract:

We assume Telefonica will post solid free cash flow based on our forecast for continued organic revenue growth and increasing organic operating income before depreciation and amortization (OIBDA) in 2023, alongside reducing capital expenditure (capex) intensity. Although we forecast that Telefonica's S&P Global Ratings-adjusted debt to EBITDA will run close to our downgrade trigger of 4.0x, our forecast that adjusted leverage should reach 3.8x by 2024 suggests a slight improvement, while the group's free operating cash flow to debt should remain comfortably above 8% and within the thresholds for the current rating. We therefore affirmed our 'BBB-/A-3' ratings on Telefonica. The stable outlook indicates our view that Telefonica's well-established positions and well-invested networks will support consistently robust free operating cash

  
Brief Excerpt:

...June 29, 2023 - We assume Telefonica will post solid free cash flow based on our forecast for continued organic revenue growth and increasing organic operating income before depreciation and amortization (OIBDA) in 2023, alongside reducing capital expenditure (capex) intensity. - Although we forecast that Telefonica's S&P Global Ratings-adjusted debt to EBITDA will run close to our downgrade trigger of 4.0x, our forecast that adjusted leverage should reach 3.8x by 2024 suggests a slight improvement, while the group's free operating cash flow to debt should remain comfortably above 8% and within the thresholds for the current rating. - We therefore affirmed our '###-/A-3' ratings on Telefonica. - The stable outlook indicates our view that Telefonica's well-established positions and well-invested networks will support consistently robust free operating cash flow and some gradual deleveraging over 2023-2024. PARIS (S&P Global Ratings) June 29, 2023--S&P Global Ratings today took the rating...

  
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:
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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable" Jun 29, 2023. Alacra Store. Nov 06, 2026. <http://www.alacrastore.com/s-and-p-credit-research/Spanish-Telecom-Operator-Telefonica-Affirmed-At-BBB-A-3-On-Solid-Cash-Flow-Outlook-Stable-3014410>
  
APA:
S&P Global Ratings’ Credit Research. (). Spanish Telecom Operator Telefonica Affirmed At 'BBB-/A-3' On Solid Cash Flow; Outlook Stable Jun 29, 2023. New York, NY: Alacra Store. Retrieved Nov 06, 2026 from <http://www.alacrastore.com/s-and-p-credit-research/Spanish-Telecom-Operator-Telefonica-Affirmed-At-BBB-A-3-On-Solid-Cash-Flow-Outlook-Stable-3014410>
  
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