Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Investing.com -- Moody’s Ratings downgraded Altice International S.a.r.l. to Caa2 from Caa1 on Wednesday, citing concerns about the telecom operator’s capital structure sustainability amid weaker performance and rising funding costs.
The rating agency also lowered Altice Finco S.A.’s backed senior unsecured instrument rating to Ca from Caa3 and Altice Financing S.A.’s backed senior secured and senior secured bank credit facility instrument ratings to Caa2 from Caa1. The outlook on all entities remains negative.
The telecom company, which operates in Portugal, Israel and the Dominican Republic, faces moderate refinancing needs over 2025-26 but will encounter a significant refinancing wall over 2027-28. At current funding rates, this would require a substantial improvement in earnings to maintain a sustainable capital structure.
Moody’s expects Altice International’s access to capital markets will likely be costlier and potentially more challenging, as other entities controlled by French entrepreneur Patrick Drahi have also experienced credit quality deterioration, including Altice France Holding S.A. and CSC Holdings, LLC.
Altice International’s EBITDA decreased by 2.9% in 2024 and fell a further 3.9% in the first quarter of 2025. This decline stemmed from lower equipment revenues from Altice Labs, stagnant growth in Portugal, and challenging market conditions in Israel.
The company’s leverage remains high with a pro-forma Moody’s adjusted debt to EBITDA ratio of 6.4x as of December 2024. This calculation excluded a €600 million bond and €436 million revolving credit facility that were repaid in the first quarter of 2025. The revolving credit facility repayment was financed through the sale of a 53% stake in media platform Teads, which generated $625 million in proceeds.
Moody’s projects similar EBITDA trends for full-year 2025, with pressure partially offset by lower capital expenditure intensity. However, the company is expected to continue generating negative free cash flow of approximately €180 million. The rating agency forecasts Moody’s-adjusted debt/EBITDA to remain around 7.0x over 2025-26.
The Caa2 rating also reflects the complexity of Altice International’s group structure, as it fully consolidates its fiber network in Portugal (Fastfiber) despite owning only 50.01%, and faces large refinancing needs from 2027 onward.
As of March 2025, Altice International had €240 million in cash (including €53 million in restricted cash) and €593 million in fully undrawn revolving credit facilities maturing in February 2027.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.