Fitch Ratings has downgraded
The Outlook is Stable. The senior unsecured instrument ratings have also been downgraded to 'B+' from 'BB-'. The Recovery Rating is 'RR4'.
The rating action follows the downgrade of
The downgrade to
Key Rating Drivers
For full key ratings drivers see 'Fitch Rates IHS Holding's Proposed Notes 'BB-' dated
Derivation Summary
See 'Fitch Rates IHS Holding's Proposed Notes 'BB-' dated
Key Assumptions
See 'Fitch Rates IHS Holding's Proposed Notes 'BB-' dated
For issuers with IDRs of 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue rating is derived from the IDR and the relevant Recovery Rating (RR) and notching, based on the going-concern (GC) enterprise value (EV) of the company in a distressed scenario or its liquidation value.
KEY RECOVERY ASSUMPTIONS
The recovery analysis assumes that
A 10% administrative claim
GC Approach
The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganisation EBITDA level upon which Fitch bases the valuation of
The GC EBITDA is estimated at
EV multiple of 5.5x
With these assumptions, our waterfall generated recovery computation (WGRC) for the senior unsecured notes is in the 'RR1' band. However, according to Fitch's Country-Specific Treatment of Recovery Ratings Criteria, the RR for corporate issuers in
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Improvement in the operating environment of the countries in which IHS operates or a positive change in the geographical mix of cashflows
Funds from operations (FFO) net leverage below 5.0x (4.5x on net debt/EBITDA) on a sustained basis, together with FFO interest coverage greater than 2.5x
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Downgrades of the sovereign Country Ceilings of the countries IHS operates in, which could lead us to downgrade our applicable Country Ceiling
FFO net leverage above 6.0x on a sustained basis (5.5x net debt/EBITDA) or FFO interest coverage below 2.0x
Weak free cash flow (FCF) due to limited EBITDA growth, higher capex and shareholder distributions, or adverse changes to the group's regulatory or competitive environment
Liquidity risks, including challenges in moving cash out of operating companies to
Best/Worst Case Rating Scenario
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Liquidity and Debt Structure
See 'Fitch Rates IHS Holding's Proposed Notes 'BB-' dated
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
(C) 2022 Electronic News Publishing, source