Moody’s reviews Millicom for downgrade

Moody's Investors Service said it placed the Ba1 long-term corporate family ratings and senior unsecured long-term debt ratings of Millicom International Cellular SA, CT Trust (Tigo Guatemala), Telecomunicaciones Digitales, SA (Tigo Panama) and Telefonica Celular del Paraguay SAE (Telecel) on review for downgrade Previously, the outlooks were stable.

“The review for downgrade reflects the increased execution risk arising from the need to boost performance and liquidity in its Colombian subsidiary, UNE EPM (Tigo UNE), a significant contributor to the group's service revenues (23%) and EBITDA (16%),” Moody’s said in a press release.

The review also considers the elevated volatility in governance created by the complexity introduced to the organizational structure by shared ownership and joint ventures, the agency said.

“This structure exposes the group to political interference and shareholder disputes, both of which can considerably affect its operations, liability, and liquidity management, as recently demonstrated in Colombia. The action also acknowledges Moody's expectation that the Millicom group will remain under persistent competitive pressures in its primary markets, potentially impeding improvement in credit metrics,” Moody’s said.

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