Fitch affirms Telekom Malaysia

Fitch Ratings said it affirmed Telekom Malaysia Bhd.'s long-term foreign-currency issuer default rating and senior debt rating at A-.

The outlook is stable.

The agency said the ratings reflect Telekom Malaysia's leading position in Malaysia's fixed-line, internet and data markets and its strong operating cash flow.

Fitch forecasts that high capex and a dividend payout ratio of 90% of profits after tax and minority income are likely to lead to negative free cash flow for at least the next two years. Nevertheless, the agency said the company has relatively high ratings headroom, and Fitch does not expect credit metrics to deteriorate materially.

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