AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.00 Decreased By ▼ -0.53 (-0.41%)
BOP 6.76 Increased By ▲ 0.08 (1.2%)
CNERGY 4.50 Decreased By ▼ -0.13 (-2.81%)
DCL 8.70 Decreased By ▼ -0.24 (-2.68%)
DFML 41.00 Decreased By ▼ -0.69 (-1.66%)
DGKC 81.30 Decreased By ▼ -2.47 (-2.95%)
FCCL 32.68 Decreased By ▼ -0.09 (-0.27%)
FFBL 74.25 Decreased By ▼ -1.22 (-1.62%)
FFL 11.75 Increased By ▲ 0.28 (2.44%)
HUBC 110.03 Decreased By ▼ -0.52 (-0.47%)
HUMNL 13.80 Decreased By ▼ -0.76 (-5.22%)
KEL 5.29 Decreased By ▼ -0.10 (-1.86%)
KOSM 7.63 Decreased By ▼ -0.77 (-9.17%)
MLCF 38.35 Decreased By ▼ -1.44 (-3.62%)
NBP 63.70 Increased By ▲ 3.41 (5.66%)
OGDC 194.88 Decreased By ▼ -4.78 (-2.39%)
PAEL 25.75 Decreased By ▼ -0.90 (-3.38%)
PIBTL 7.37 Decreased By ▼ -0.29 (-3.79%)
PPL 155.74 Decreased By ▼ -2.18 (-1.38%)
PRL 25.70 Decreased By ▼ -1.03 (-3.85%)
PTC 17.56 Decreased By ▼ -0.90 (-4.88%)
SEARL 78.71 Decreased By ▼ -3.73 (-4.52%)
TELE 7.88 Decreased By ▼ -0.43 (-5.17%)
TOMCL 33.61 Decreased By ▼ -0.90 (-2.61%)
TPLP 8.41 Decreased By ▼ -0.65 (-7.17%)
TREET 16.26 Decreased By ▼ -1.21 (-6.93%)
TRG 58.60 Decreased By ▼ -2.72 (-4.44%)
UNITY 27.51 Increased By ▲ 0.08 (0.29%)
WTL 1.41 Increased By ▲ 0.03 (2.17%)
BR100 10,450 Increased By 43.4 (0.42%)
BR30 31,209 Decreased By -504.2 (-1.59%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)
Markets

Telecom Italia shares, bonds dip after Moody's downgrade

  • The yield on a bond maturing in May 2026, rose to 1.69pc from 1.60pc on Thursday, while a September 2025, bond yielded 1.60pc on Friday, up from 1.50pc the previous session.
Published December 11, 2020

MILAN: Shares in Telecom Italia (TIM) fell more than 2pc on Friday after Moody's downgraded the credit ratings of Italy's biggest phone group by one notch and said the outlook remained negative.

The price of TIM's bonds also fell at the open, pushing yields higher.

The yield on a bond maturing in May 2026 rose to 1.69pc from 1.60pc on Thursday, while a September 2025 bond yielded 1.60pc on Friday, up from 1.50pc the previous session.

"Moody's effectively highlighted the lights and shadows of TIM's equity story", Banca IMI analysts said.

"Despite CEO (Luigi Gubitosi's) efforts to organically and inorganically reduce the group's leverage, Moody's downgrade separates TIM from the investment grade level by two notches," it wrote in a note.

TIM's gross debt totalled 32.3 billion euros ($39.2 billion)as of Sept. 30.

Late on Thursday, Moody's cut TIM's long-term rating to 'Ba2' from 'Ba1', citing "a very competitive operating environment in Italy which will further constrain the company's ability to strengthen cash flow generation and reduce leverage."

Moody's flagged higher business and financial risks due to fresh investments in Brazil, the restored dividend policy and the increasing complexity of the group structure.

Broker Fidentiis said the move, albeit to be expected given the negative outlook on the rating since 2019 and the impact of the pandemic which hurt 2020 earnings, was negative for the stock because it could lead to higher debt costs.

Moody's expects TIM's adjusted net debt-to-core profit ratio to peak at 4.2 times in 2020 and to gradually start decreasing to reach 3.7 times by 2022.

At 0940 GMT, TIM shares were down 2.4pc, compared with a 0.8pc fall in Milan's blue chip index.

Comments

Comments are closed.