UK-based teleport and TV and cellular distribution specialist Arqiva has seen its securitised and high-yield bonds re-rated by Fitch Ratings.
Fitch specifically rates Arqiva’s whole business securitisation’s (WBS) bonds at “BBB” and its High Yield (HY) bonds at “B-“, and in the process revised the its outlook on the HY bonds to “Negative” from “Stable”. Fitch’s outlook on Arqiva’s WBS bonds is “Negative”.
Fitch says “The Negative Outlooks reflect the remaining uncertainty from Arqiva’s strategic overhaul, together with the recent operational restructuring and departures of key personnel such as, in 2015, the CEO, CTO and MD of Digital Platforms and, in 2016, the CFO (already replaced in May with an experienced executive). However, Fitch understands from Arqiva that it aims to increase its focus on more core infrastructure assets, which could be credit positive.”
Fitch says it could revise its formal outlook to “Stable” once it receives in 2017 “further clarifications of both the group’s strategy over the longer term with additional confirmation of the cost-savings sustainability and the refinancing of [Arqiva’s Term Loan”. This new Term Loan is needed to refinance the High Yield debt “soon”, says Fitch.
Fitch, as part of its overall report, stresses that it views Arqiva’s positively, and that the company has “consistently met its various key contract operating conditions.”