Fitch Rating is expecting to assign telco Tigo Guatemala’s proposed US$500m senior unsecured notes a BB+ rating, based on the group’s strong market position and low leverage profile.
In a statement, Fitch noted that Tigo is Guatemala’s largest…
Fitch Rating is expecting to assign telco Tigo Guatemala’s proposed US$500m senior unsecured notes a BB+ rating, based on the group’s strong market position and low leverage profile.
In a statement, Fitch noted that Tigo is Guatemala’s largest mobile service provider and has an “entrenched market position.”
However, Fitch warned that Tigo’s top line growth will be slow, considering the Guatemalan mobile industry has an over-100% penetration rate.
Tigo wants to use proceeds from the bond to mainly repay outstanding debt, pegged at US$425m by Q3 2013, and the remainder for a shareholder payout, according to the Fitch statement.
About a week ago, Tigo owner Millicom signed a put and call agreement with Tigo co-owner Miffin Associates. The agreement gives Millicom an unconditional call option to acquire Miffin’s 45% stake for at least a two-year period.
