(Finance) – S&P Global Ratings has assigned to Optics Bidcothe vehicle that purchased NetCo (i.e. the fixed network infrastructure and wholesale activities) from TIMThe “BB+” rating.
On July 1, 2024, KKR completed the acquisition. The US private equity giant has the deal was funded through the issuance of approximately €4.7 billion in senior secured term loans, an equivalent of €5.5 billion of TIM swapped bonds and a substantial capital injection.
Optics will be the main fixed line wholesale operator in Italybenefiting from its significant market share in the fixed broadband and ultra-broadband market with limited network overlap, high capital barriers and favorable growth opportunities.
However, S&P expects thelarge capex program The company’s fiber-to-the-home (FTTH) will result in negative operating cash flow (FOCF) generation, which, combined with the dividend payments expected, will increase the expected leverage over the next two years.
L’negative outlook reflects the expectation that Optics has no rating headroom above the maximum leverage trigger of 6.25x over the forecast period, making it more difficult for the company to absorb a deviation from forecasts.