SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

T-Mobile has been upgraded by a notch by both Fitch and Moody’s due to its improved credit profile. The American wireless network operator has been upgraded to investment grade, BBB- from BB+ by Fitch and to Ba1 from Ba2 by Moody’s. The company’s rating was also raised to BB+ from BB by S&P last week on August 3. The rating actions reflect the strong financial performance of the company post strategic initiatives including integration of Sprint’s network. According to Fitch, T-Mobile’s business has been boosted post combination of the spectrum portfolio of Sprint which is forecasted to increase its coverage to ~200mn people by end of 2021 and to ~300mn by end of 2023. The adjusted debt/EBITDA for 2021 is likely to be ~4.5x assuming an EBITDA of $20bn and 4x in 2022 assuming an EBITDA of $21bn vs. 4x in 2020. Fitch said, “T-Mobile’s ratings receive a one-notch uplift from its standalone credit profile due to its ownership by Deutsche Telekom AG… T-Mobile also materially benefits from combined global purchasing scale for network, handset and general procurement.” Moody’s also expects that T-Mobile’s debt leverage will fall to ~4x by end 2022 and that it will maintain committed liquidity sufficient to address 12-18 months of total cash needs. Moody’s said, “T-Mobile’s Ba1 CFR reflects the company’s solid integration progress and accelerated achievement of operating cost synergies following its April 2020 merger with Sprint. Achievement of synergies associated with the multi-year integration of the wireless network of Sprint Corporation (Sprint) into the legacy T-Mobile wireless network continues to progress both well ahead of schedule.”

T-Mobile’s bonds were mixed. Its 2.25% 2026s were down 0.15 to trade at 101.25 while its 2.625% 2029s were up 0.33 to trade at 100.78.
For the Fitch ratings, click here and for Moody’s ratings, click here
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