Fitch takes negative view on Eircom

Friday 22 March 2013 18.48
The IDR takes into account the reduced debt that Eircom exited examinership in early June 2012
The IDR takes into account the reduced debt that Eircom exited examinership in early June 2012

Fitch Ratings has affirmed Eircom Holding Ireland Limited's default rating at 'B-' and the instrument and Recovery Ratings on the company's senior secured bank debt at 'B'/ 'RR3'.

The Outlook on the IDR is Negative.

The IDR takes into account the reduced debt that Eircom exited examinership in early June 2012.

The IDR also takes into account the company's position as the country's incumbent telecom operator, its sizeable but declining fixed line market share and negative free cash flow generation.

The negative outlook reflects the operating challenges the company faces in turning around the fixed-line business.

The outlook also reflects Its weaker competitive position relative to the cable operator, in the context of its ability to offer triple-play, may lead to ongoing line losses beyond management's expectations, adding further top-line, margin and cash flow pressure.

A sub-scale position in a small but competitive four player mobile market adds a further constraint to the operating profile, albeit one that new management appear from initial signs to be focused on addressing.