Moody's lowers euNetworks view to negative

Moody's Investors Service said it changed the outlook on euNetworks Holdings 2 Ltd. to negative from stable.

The agency also said it affirmed the company's B2 corporate family rating, B2-PD probability of default rating and the B2 rating of the group's senior secured term loan B due 2025.

The agency also said it assigned a B2 rating to the €75 million revolving credit facility due 2024.

euNetworks has raised an additional €30 million under its term loan B, the proceeds of which will be used to fund organic and inorganic investments, including one larger scale project in 2019 to support the future bandwidth demand of its customer base, Moody's said.

That's in addition to the €50 million of growth equity capital being injected by Stonepeak Infrastructure Partners, the agency noted.

The negative outlook reflects the high leverage of the company at about 6.3x as of 2018, as well as the materially negative free cash flow generation expected in 2019 through 2020, Moody's said.

The ratings reflect an expectation that the company can nonetheless return back to largely neutral free cash flow generation from 2021 and de-lever in line with expectations for the B2 rating, helped by EBITDA growth, the agency said.

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