Fitch cuts Deutsche Telekom view to negative

Fitch Ratings said it affirmed Deutsche Telekom's long-term issuer default rating at A- and removed it from Rating Watch negative. Its short-term issuer default rating is affirmed at F2.

A negative outlook is assigned.

The action follows the release of terms for the company's acquisition of a stake in Hellenic Telecommunications Organisation SA, which is rated BBB with stable view.

Fitch noted that the transaction should not lead to an increase in Deutsche Telekom's net leverage as the deal will be made in several phases. The company remains strongly free cash flow-generative, which allows it to undertake moderate-sized acquisitions without negatively impacting its financial flexibility, the agency said.

Fitch also said this strategic acquisition will secure Deutsche Telekom's entry into new regional markets.

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