Trilogy International Partners LLC #B# Ratings Outlook Remains Stable

Stocks and Financial Services Press Releases Thursday April 26, 2018 09:53
MEXICO CITY--26 Apr--S&P Global Ratings

MEXICO CITY (S&P Global Ratings) April 25, 2018--S&P Global Ratings affirmed its long-term corporate credit rating on Trilogy International Partners LLC (Trilogy) at 'B'. At the same time, we affirmed the 'B' rating on the company's $350 senior secured notes due 2022. The outlook remains stable.

Trilogy's profitability dropped in 2017 due to problems at its new operating support system (OSS) that prevented the customer base in New Zealand from increasing and to lower data consumption following modifications to a popular social media app in Bolivia. As a result, Trilogy's credit metrics for that year improved slower than we had expected, although they continue to do so due to a $100 million debt reduction in 2017. In addition, we believe that Trilogy is well positioned to capture the benefits from its network in the next few years, given that the LTE deployment in New Zealand will be about 97% and about 90% in Bolivia by the end of 2018. In our opinion, improved telecom infrastructure will result in higher data consumption among the company's customer base and will gradually improve its profitability and credit metrics.

Moreover, we believe that Trilogy will continue to encourage the customer migration to postpaid from prepaid, which should also improve its overall blended ARPU. Despite these enhancements, Trilogy remains the third-largest telecom player in Bolivia with about 23% of the subscriber market share, behind Empresa Nacional de Telecomunicaciones S.A. (Entel) and Telefonica Celular de Bolivia (Tigo Bolivia). In addition, the company's subsidiary, 2degrees, holds 24% of New Zealand's telecom market, behind Spark New Zealand Ltd (A-/Stable/A-2) and Vodafone New Zealand Ltd.

In our opinion, the company's market shares in both countries aren't likely to change significantly in the short term. This, along with Trilogy's somewhat limited pricing power, is likely to result in lower profitability than those of its peers. In our opinion, Trilogy will continue to deleverage through higher EBITDA generation and moderate need for debt. Therefore, its debt to EBITDA will drop below 4.0x over the next few quarters, in our opinion. In addition, Trilogy's lower interest burden as a result of the 2017 refinancing of senior secured notes and cost stabilization, given about $7 million in extra costs due to OSS issues past year, will help the company use its cash flows to fund working capital needs, capital expenditures (capex), and the spectrum license renewal in Bolivia for next 12-18 months. Likewise, we expect the company's free operating cash flow (FOCF) to debt to improve by the end of 2018.


Latest Press Release

DHIPAYA LAUNCHES THE PROJECT TIP GATEWAY HIGHLIGHTING THE SYSTEM CONNECTING TO TECH STARTUP SELLING INSURANCE VIA BUSINESS PARTNERS CATERING TO CONSUMERS IN THE DIGITAL AGE

Dhipaya Insurance Public Company Limited., moves towards the leadership of Digital Insurance at full course, mandating Acrosure to design and develop "Tip Gateway Powered by Acrosure" world's first "Self-serve Insurance API Gateway" embracing the concept...

mai welcomes integrated logistics operator Sonic Interfreight on October 19

Market for Alternative Investment (mai) will list Sonic Interfreight pcl, a total logistics services provider, on October 19, under the ticker symbol "SONIC". The company has a market capitalization at its initial public offering (IPO) of THB 1.07...

BGC Begins First Day of Trading of Its Shares in the Stock Exchange of Thailand Highlighting Potential As Thailands Largest Packaging Manufacturers Ready To Be Leader in ASEAN

BG Container Glass Public Company Limited (BGC) is floating its shares in the Securities Exchange of Thailand for the first trading today (18 Oct. 2018). The company is confident of positive investors' response. The company's vision is to be the leading...

Performance Marketing Firm LavaPM Brings China Perspective to 2018 SiriusDecisions APAC Summit

LavaPM was the exclusive Platinum Sponsor for SiriusDecisions 2018 APAC B2B Summit, which was held in Singapore on October 9. Over 200 B2B marketers and product leaders participated in the event where discussions were mainly on addressing...

Photo Release: KBank and AP unveil home loan campaign with special interest rates for two years

Mr. Charat Siriphongvuttikorn (right), KBank First Senior Vice President, and Mr. Pamorn Prasertsan, Chief Business Group: Low Rise Product of AP (Thailand) Public Co., Ltd., recently launched the "Happy 2 in 1" campaign for K-Home Loan customers. Under...

Related Topics