Fitch lowers Tele Columbus view to negative

Fitch Ratings said it revised the outlook on Tele Columbus AG's long-term issuer default rating to negative from stable and affirmed the issuer default rating at B.

Fitch also said it downgraded the rating on Tele Columbus's senior secured debt instruments to B+ with recovery rating of RR3 from BB- with recovery rating of RR2.

The integration with Pepcom and Primacom took longer than initially expected by management and Fitch said it was a drag on the company's operating and financial performance in 2018.

The negative outlook reflects a spike in funds from operations adjusted net leverage to 6.6x at the end of 2018, along with an expectation that it is likely remain high during 2019, the agency said.

The company is expected to de-lever in 2020 to lower than the downgrade threshold of 6x, Fitch added.

The agency also said it believes that the execution risks to increase EBITDA and improve free cash flow required to reduce leverage remain high.

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