S&P rates Summit Digitel, notes BBB-

S&P said it assigned BBB- ratings to Summit Digitel Infrastructure Pvt. Ltd. and its planned senior secured notes. The outlook is stable.

“Summit's earnings and cash flow will likely remain resilient. The company's 30-year non-cancellable master service agreement (MSA) for leasing its telecommunications tower to anchor tenant Jio protects it from renewal risk and provides high earnings predictability. This lease term is significantly longer than the typical ten-year tower leases that Summit's rated peers have, and what we expect the company's leases with other tenants to be,” S&P said in a press release.

The outlook reflects an expectation Summit will maintain its solid market position and good relationships with Jio while increasing colocations with other tenants.

“We believe Summit's leverage will improve to be less than 6x on a sustained basis in the next 18-24 months,” the agency said.

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