S&P lowers BT to negative

S&P said it revised the outlook to negative from stable on BT Group plc, its fully owned subsidiaries EE Ltd. and British Telecommunications plc, along with EE's subsidiary, EE Finance plc.

The agency also said it affirmed the long-term and short-term corporate credit ratings on all four entities at BBB+ and A-2, respectively.

S&P also said it affirmed the BBB+ long-term issue ratings on the group's unsecured debt and A-2 short-term issue rating on its commercial paper.

The outlook revision follows the downward revision of the base-case assumptions for BT Group in financial years 2017 and 2018, the agency said.

The company recently revised down its outlook for financial year 2018, reflecting the impact of improper accounting practices in its Italian operations and the expectation of weaker public sector revenues, S&P said.

As a result, the agency said it now expects weaker credit metrics, including an adjusted leverage of about 2.8x compared with a leverage of 2.4x to 2.5x in the previous base case, the agency said.

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