Moody's lowers Liquid Telecommunications

Moody's Investors Service said it downgraded Liquid Telecommunications Holdings Ltd.'s corporate family rating to B1 from Ba3 and probability of default rating to B1-PD from Ba3-PD.

Moody's also said it downgraded the issue rating to B1 from Ba3 on the $730 million senior secured notes due 2022 issued by Liquid Telecommunications Financing plc.

The outlook is negative.

The downgrades were prompted by the removal of the one-to-one relationship between the Zimbabwe RTGS $ (real time gross settlement dollars) and replaced it with a floating exchange rate that is subject to market forces, Moody's said.

The downgrades reflect the group's increased exposure to foreign-currency risks as the RTGS $ currency in Zimbabwe is no longer at parity to the U.S. dollar, the agency said.

This has created a large currency mismatch and that increases the volatility of credit metrics, notably leverage and interest cover ratios, Moody's said.

The company has had recent difficulties in repatriating cash from its Zimbabwe operations, the agency noted.

The ratings also consider its strong market position as the largest pan-African fiber network covering 13 countries across Africa, Moody's said, and long-standing contractual relationships with a blue-chip customer base.

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