Author Archives: IJGResearch

As reported in today’s IJG Daily, Fitch Ratings Agency yesterday downgraded Telecom Namibia Limited’s (TN) Long-term local currency Issuer Default Rating (IDR) to ‘BB+’ from ‘BBB-‘ and its National Long-term rating to ‘A-(zaf)’ from ‘A(zaf)’, putting both ratings on a negative watch.

The agency noted that “The downgrade reflects our view that state support for TN has weakened. TN’s standalone credit profile has deteriorated with no significant evidence of government support. We also note that so far this year TN has not requested additional government support. The erosion of TN’s cash flow generation looks to continue into the rest of 2014 given a decline in fixed-line revenue and high capital expenditure.“

As such, the company’s IDR rating is no longer investment grade, and considered high risk, or “junk”. This can be expected to have a negative impact on demand for the company’s debt instruments, as most asset managers’ mandate will not allow them to invest in such.

See more here: Telecom Namibia Downgrade: Reuters