IBI-Rating has updated the credit ratings of «Ukrtelecom» PJSC and its issues of interest-bearing bonds

IBI-Rating informs on updating of long-term credit ratings «Ukrtelecom» PJSC and its issues of interest-bearing P-Q and T-V series bonds. According to the results of updating the credit ratings were downgraded from uaA to uaBBB grade and from a «stable» to a «negative» outlook (which pointing to the possibility of further downgrading). The credit ratings have also been included in the Credit Watch List, where are the ratings which can be revised in the short term.

These rating actions are due to uncertainty regarding the future activities of «Ukrtelecom» PJSC, related to the possibility of its return to state ownership, as well as the arrest of shares (due to default of debt by its majority shareholder). In addition, «Ukrtelecom» PJSC is a party to litigation, the outcome of which may significantly affect in its financial condition.

Activity of «Ukrtelecom» PJSC on the results of 2016 and 3 months 2017 was profitable with volumes of net income almost unchanged compared to similar periods. The issuer maintained a fairly high share of equity in the overall structure of funding sources. The level of debt burden (the ratio of EBITDA and net debt) as a result of attracting new loans has grown, but is estimated as not high.

«Ukrtelecom» PJSC remains the largest operator of telecommunications services in the Ukraine. The Company provides a wide range of services for households and businesses, including: local (urban and rural), long distance and international telephone services, 3-G mobile communication services, computer communication services (including Internet access), telegraph communication and wire broadcasting services, as well as services of providing telecommunications channels for use. The issuer holds leading positions in the fixed line market and broadband Internet access, which are provided by its own powerful transport telecommunications network, covering all regions of the country. Also, prospects of the telecommunication services market cause intensified competition. There is a decline in demand for fixed line services and its gradual replacement by mobile communication services, which corresponds to the global trend.

In order to conduct the analytical research the materials provided by «Ukrtelecom» PJSC have been used, including: the annual financial statements for 2014-2016 and 3 months of 2017, background information on activities of «Ukrtelecom» PJSC, information on the issue of bonds, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

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