S&P Global just bumped Telkom's credit rating up a notch to BB+ from BB, and the move tracks with South Africa's own sovereign upgrade that dropped a bit earlier. The telecom company sits close enough to the government that its rating basically follows whatever happens with the national fiscal picture, but Telkom also has solid standalone fundamentals that let it edge out one level above the country's foreign currency score.
The company sold off its tower business, Swiftnet, earlier this year and dumped most of that cash into paying down debt, which crushed its debt-to-EBITDA ratio from 2.0x down to 0.9x. S&P thinks that metric will hang around 0.8x to 1.0x going forward, and the rating agency confirmed Telkom passed its liquidity stress test with a standalone credit profile sitting at bbb-. The outlook stays positive because management keeps running a tight ship on the balance sheet while pushing its data-focused strategy.
The company sold off its tower business, Swiftnet, earlier this year and dumped most of that cash into paying down debt, which crushed its debt-to-EBITDA ratio from 2.0x down to 0.9x. S&P thinks that metric will hang around 0.8x to 1.0x going forward, and the rating agency confirmed Telkom passed its liquidity stress test with a standalone credit profile sitting at bbb-. The outlook stays positive because management keeps running a tight ship on the balance sheet while pushing its data-focused strategy.
