Fitch assigns A1 Towers BBB-

Fitch Ratings said it assigned expected BBB- issuer default and senior unsecured ratings to A1 Towers Holding GmbH. The outlook is stable.

A1 plans to obtain a €500 million unsecured term loan and sell €500 million in senior unsecured notes.

“The expected ratings are assigned with the expectation that the initial guarantee of the senior unsecured debt from Telekom Austria AG (TAG, A-/positive) will be transferred to a new entity EuroTeleSites AG, with no recourse to TAG thereafter.

“A1 Towers' ratings reflect its highly visible cash flow profile supported by long-term inflation-linked contracts with its strong anchor tenant TAG and third parties. A1 Towers has a leading market position in its largest market, Austria, and is geographically diversified across six markets. Rating constraints include high initial leverage and limited customer diversification beyond its core anchor tenant, TAG. We also expect negative free cash flow (FCF) over the next two years, driven by high capex,” Fitch said in a press release.

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