Moody's trims Telefonica del Peru

Moody's Investors Service said it downgraded Telefonica del Peru SAA's corporate family and senior unsecured ratings to Ba3 from Ba2. Simultaneously, Moody's placed the ratings under review for further downgrade.

“The downgrade to Ba3 reflects Telefonica del Peru's persistently weak operating performance, which has been consistently below Moody's original expectations and the average for regional peers. Despite the recent improvement in cost structure and recovery in service revenues when compared to pandemic lows, Moody's believes that operating performance will remain pressured over the next 12-24 months given the intense market competition and challenging macroeconomic environment in Peru,” the agency said in a press release.

Additionally, the agency noted the payment of PEN 354 million in tax charges made in October to the tax authority, Sunat, and the potential settlement of a tax dispute, estimated at about PEN 2.8 billion according to the company's provisions on the balance sheet.

“Moody's forecasts that Telefonica del Peru's leverage will close 2022 at around 2.7x but may increase to about 4x due to this potential settlement, as it will likely have to be debt funded,” the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.