Moody's Upgrades Helios Towers to Ba3 on Strong Finances

Moody's Elevates Helios Towers Rating to Ba3

Moody’s Ratings has upgraded Helios Towers plc’s corporate family rating to Ba3 from B1, assigning a stable outlook. The upgrade reflects the company's solid operational performance, increased free cash flow, and a firm commitment to reducing its debt leverage.

Performance and Policy Shift Overview

Helios Towers has demonstrated a strengthened credit profile, reducing its Moody’s adjusted debt-to-EBITDA ratio to 4.5x. The company also introduced a shareholder distribution policy, supported by a revised net leverage target of 2.5x to 3.5x. This move, coupled with improved cash flow, prompted Moody’s to also upgrade the company's ESG governance issuer profile score.

Economic and Market Implications

The Ba3 rating positions Helios Towers more favorably in credit markets, potentially lowering future borrowing costs. However, the rating remains constrained by the sovereign risks of its primary markets, Tanzania and the Democratic Republic of the Congo, which account for a combined 70% of its EBITDA. A future upgrade is unlikely without improvements in these sovereign ratings.

Outlook Summary

The stable outlook is based on expectations that Helios Towers will maintain its financial policies, continue generating positive free cash flow, and sustain solid credit metrics. Moody's projects the company's adjusted debt-to-EBITDA ratio will decline to approximately 3.9x by the end of 2026.

FAQ

Q: What was Helios Towers' previous rating from Moody's?
A: The previous corporate family rating was B1 with a positive outlook.

Q: Why is the new rating capped?
A: The rating is constrained by the sovereign credit ratings of its key operating countries, primarily Tanzania and the Democratic Republic of the Congo.

Source: Investing.com