S&P downgrades Delta Fiber

S&P said it lowered to B- its long-term issuer credit rating on Gamma Infrastructure III BV (Delta Fiber).

The outlook is stable.

At the same time, the agency lowered to B- the issue rating on the €595 million senior secured term loan B, including the proposed €95 million upsize. The recovery rating on the loan is 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default.

“The downgrade follows the revision of our base case to take into account the slower cash conversion of the group's backlog and the additional impact of construction bottlenecks,” S&P said in a news release.

“These drawbacks have resulted in the slower-than-expected rollout of the group's fiber network, delays in connecting contracted houses to the core network, and expansion EBITDA that is consequently lower than in our previous base case.”

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