Fitch lowers Singtel view to negative

Fitch Ratings said it revised the outlook on Singapore Telecommunications Ltd.'s (Singtel) long-term foreign- and local-currency issuer default ratings to negative from stable and affirmed the issuer default ratings and senior unsecured rating at A+.

The agency also was revised on Singtel's wholly owned subsidiary, Singtel Optus Pty Ltd. to negative from stable and affirmed the issuer default rating and Optus's senior unsecured rating at A.

The outlook revision follows Singtel's plan to subscribe to the rights issue of its Indian associate, Bharti Airtel Ltd., Fitch said, as well as weaker growth prospects for the company amid intensifying competition in its home markets.

Singtel's ratings include a one-notch uplift from its standalone credit profile of A due to links with the sovereign, the agency said, and weak incentives for the state to provide support.

Singtel plans to fully subscribe to the rights entitlement for its 15% direct stake in Bharti for $525 million, the agency explained.

The rights issue is subject to regulatory approval, which Fitch said it believes will be completed in 2020. Post-completion, Singtel will have an effective stake of 35.2% in Bharti, but will remain the Indian telco's largest shareholder, Fitch said.

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