Moody's changes BT outlook to stable

Moody's Investors Service said it changed the outlook to stable from negative and affirmed British Telecommunications plc's Baa2 senior unsecured and long-term issuer rating, (P)Baa2 senior unsecured medium-term note program, and EE Ltd.'s Baa2 long-term issuer rating. The agency also affirmed the Ba1 long-term subordinate rating on BT’s the hybrid notes.

"The change of outlook to stable from negative mainly reflects (1) Moody's expectation that BT will experience further recovery in EBITDA in fiscal year ending 31 March (FY) 2023 supported by a more favorable pricing environment in the consumer segment, sustained fibre-to-the-premise (FTTP) take-up for Openreach, and the delivery of cost savings through the optimization program, (2) Moody's projection that BT will maintain its Moody's adjusted gross leverage at below 3.5x due to the improving operating performance and the relatively lower IAS19 pension deficit, and (3) the company's improving business profile as BT deploys fibre to the premises (FTTP) at high pace to offer gigabit speed broadband to its own and wholesale customers and partly fend off competition from alternative network providers," said Sebastien Cieniewski, a Moody's vice president, senior credit officer and lead analyst for BT, in a press release.

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