Fitch downgrades WOM

Fitch Ratings said it downgraded WOM SA's long-term foreign-currency issuer default rating and local-currency IDR to B+ from BB-. Fitch has also pared the 2024 and 2028 unsecured U.S.-dollar-denominated notes issued by Kenbourne Invest SA to B+/RR4 from BB-.

“The downgrades reflect a shift in WOM's financial policy suggesting a less clear path to deleveraging. This change followed the company's announcement that it plans to make a minority equity investment of $100 million into WOM Colombia as well as WOM Chile's material usage of its $100 million factoring facility with IDB Invest. Fitch has made analytical adjustments that result in the latter being treated as short-term secured debt,” the agency said in a press release.

WOM plans to use the proceeds from added tower sales to fund the deal. “As a result of this planned investment, Fitch now expects that lease-adjusted net leverage of WOM Chile will remain above 4.5x, consistent with a B+ rating. Fitch does not project that the company will receive dividends from this investment over the rating horizon,” the agency said.

The outlook is negative.

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