Summary: Chorus Ltd.

Strong market position as owner of the dominant fixed-line telecommunications wholesale access network in New Zealand High capital barriers to competition Regulatory risks associated with the pricing of network services Network volume risks associated with fixed-to-mobile substitution and line loss to local fiber companies Sizable capital expenditures to fund the build-out of fiber network Manageable cost escalation risks associated with the remaining Ultra-Fast Broadband (UFB) fiber-to-the-home (FTTH) rollout Leverage increasing to about 4.0x at the peak of the build-out in 2020 Financial policy framework that is supportive of the 'BBB' rating The stable outlook reflects our expectation that Chorus Ltd.'s strong network position and prudent approach to capital management will offset risks at the 'BBB' rating level associated with the

...Business Risk: Strong Financial Risk: Significant + Strong market position as owner of the dominant fixed-line telecommunications wholesale access network in New Zealand + High capital barriers to competition + Regulatory risks associated with the pricing of network services + Network volume risks associated with fixed-to-mobile substitution and line loss to local fiber companies + Sizable capital expenditures to fund the build-out of fiber network + Manageable cost escalation risks associated with the remaining Ultra-Fast Broadband (UFB) fiber-to-the-home (FTTH) rollout + Leverage increasing to about 4.0x at the peak of the build-out in 2020 + Financial policy framework that is supportive of the '###' rating...

Summary