Fitch cuts WOM to CCC-

Fitch Ratings downgraded the long-term foreign currency and local currency issuer default ratings of WOM Mobile SA to CCC- from B-.

The dollar-denominated bonds issued by Kenbourne Invest SA were also moved to CCC-/RR4 from B-/RR4.

The bonds issued by Kenbourne are secured by WOM Mobile and its subsidiaries.

The rating watch negative has been removed.

The maturity date on the company’s $348 million of outstanding notes due Nov. 26, 2024 is approaching and WOM has a weak liquidity position and heightened refinancing risk given delays in the refinancing process.

Additionally, free cash flow is likely to remain negative through at least 2024, further straining liquidity.

Unless the company can reach a deal with potential creditors and/or shareholders or raise sufficient cash through a sale of assets to refinance its 2024 bonds over the next three months, further downgrades are likely to occur given the increased risk of a debt restructuring or a distressed exchange.

Fitch believes an exchange could be a potential outcome given challenging credit market conditions and limited time to maturity for the notes.

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