Fitch cuts Tigo Panama to junk

Fitch Ratings said it downgraded Telecomunicaciones Digitales, SA's (Tigo Panama) long-term foreign and local currency issuer default ratings to BB+ from BBB-. The agency also cut the company's senior unsecured notes to BB+ from BBB-.

“The downgrade reflects a shift in financial policy from Tigo Panama's parent, Millicom International Cellular SA (BB+/stable), over the past year due to the cash pooling and transfers mechanisms within the group as evidenced by Millicom's upstreaming cash from Tigo Panama through a value-creating fee (VCF), consistent with the practice of charging VCFs to Millicom's other operating subsidiaries. It also reflects strategic influence toward its subsidiaries toward an asset-light strategy as evidenced by the pending Lati transaction,” Fitch said in a statement.

The outlook is stable.

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