Fitch changes Sistema view

Fitch Ratings said it revised the outlook on Sistema PJSFC's long-term issuer default rating to stable from negative and affirmed the issuer default rating at BB-.

“The revision of the outlook is driven by our expectation that Sistema's leverage at the holding company (holdco) level (defined as net debt-to-dividends and other forms of recurring income) will gradually decline in 2019-2020 after peaking at 4.3x at the end of 2018,” the agency said in a news release.

“The deleveraging will primarily be supported by the stable stream of dividends Sistema receives from its largest asset, PJSC Mobile TeleSystems (MTS; BB+/stable), and by share buyback programmes conducted by MTS, as well as sustainable cash flow contributions from other subsidiaries.”

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