Credit rating agencies Fitch and Standard & Poor’s have given Bahraini incumbent Batelco Group its first public investment grade credit ratings, making it eaiser for the company to take on debt and to tap capital market if necessary.
In a statement,…
Credit rating agencies Fitch and Standard & Poor’s have given Bahraini incumbent Batelco Group its first public investment grade credit ratings, making it eaiser for the company to take on debt and to tap capital market if necessary.
In a statement, Batelco CEO Shaikh Mohamed bin Isa Al Khalifa said: “These ratings will further enhance our ability to diversify our sources of funding should we seek to secure future financing from debt or capital markets.”
According to Batelco Group Fitch has given it an issuer default rating of “BBB-” and S&P has assigned it a “BBB-” long-term and “A-3” short-term foreign and local currency corporate credit rating.
Fitch said in its commentary that the issuer default rating for Batelco reflected its assessment of the sovereign’s creditworthiness, noting that the government of Bahrain owns a 78% direct and indirect stake in Batelco.
It has rated the government at “BBB/Stable”.
Fitch said that “government involvement in material decisions (such as expansion outside Bahrain through acquisitions) indicates inherent government support at the current ratings level”. The rating reflected the company’s “leading position in the domestic market, its robust free cash flow (FCF) generation capability at a group level despite elevated competition and falling EBITDA margins in the domestic market at 9M11”.
The agency also noted that Batelco has no debt on its balance sheet, and that the company had cash and bank balances of BD86.8m (US$230m) for the nine months that ended on 30 September.
Further information on Standard & Poor’s rating was not available before the press deadline.
Batelco commented that the ratings were indicative of its strategy to diversify its revenue streams and profits through expanding its foreign operations.
Batelco now operates through subsidiaries in seven countries in the Middle East and North Africa, offering a range of mobile, broadband and business-focussed telecoms/ISP services. The company plans to further diversify and grow in foreign markets.
