Fitch places Eutelsat on watch

Fitch Ratings said it placed Eutelsat Communications SA's (Eutelsat) BBB issuer default rating and Eutelsat's and Eutelsat SA's senior unsecured ratings, BBB- and BBB, respectively, on rating watch negative.

The placement follows the company's announcement of its intended merger with OneWeb, the agency said.

“The RWN reflects prospective higher leverage on merger completion, significantly increased execution and free cash flow (FCF) risks and reduced financial flexibility to manage unforeseen operational weakness. All this could result in a tightening of the company's leverage thresholds per rating band by 0.3x to 0.5x and result in a one to two-notch downgrade,” Fitch said in a press release.

The agency said it aims to resolve the RWN once the deal closes in early 2023.

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