Creditreform Rating has affirmed the unsolicited corporate issuer rating of Deutsche Telekom AG as well as the unsolicited corporate issuer rating of Deutsche Telekom International Finance B.V. at BBB+. Creditreform Rating has also affirmed the unsolicited corporate issue rating of the long-term local currency senior unsecured notes issued by Deutsche Telekom AG and Deutsche Telekom International Finance B.V. at BBB+. These issues are included in the list of ECB-eligible marketable assets, which can be found on the ECB's website. The outlook for the ratings remains stable. For more details regarding the ratings, please refer to our rating report below.
Creditreform Rating has affirmed the unsolicited corporate issuer rating of Deutsche Telekom AG at BBB+. The outlook remains stable. Despite the COVID 19 pandemic and the merger between T-Mobile US and Sprint, we believe that the Group's operating earnings and internal cash flow generation have improved further. However, the consolidation of Sprint led to a significant increase in total assets and a disproportionate rise in financial debt. The Deutsche Telekom Group does not expect to be able to reduce the ratio of net debt to adjusted EBITDA below the strategic threshold of 2.75x until 2024, which will have a limiting effect on the rating. Deutsche Telekom Group will continue to have high investment needs in connection with the development and expansion of a competitive network infrastructure, while also integrating and restructuring Sprint business. Even though, we believe that the Group´s strong market position, solid liquidity position and resilient business model as evidenced during the COVID-19 pandemic will enable it to overcome existing challenges and to meet its strategic plans, thus sustaining adequate balance sheet ratios.
Creditreform Rating has confirmed the unsolicited corporate issuer rating of Deutsche Telekom AG at BBB+. The outlook remains stable. The merger of T-Mobile US and the Sprint Corp., which led to the incorporation of Sprint into the consolidated accounts of Deutsche Telekom AG resulted, in our opinion, in a merely moderate deterioration of the balance sheet ratios of 30.09.2020. We think that the result of the financial ratios analysis will remain stable for the whole of 2020 without taking into consideration (possible) one-time effects. We are of the opinion that the Deutsche Telekom AG still has a strong market position despite the high investment and capital requirements in connection with the establishment and expansion of a competitive network infrastructure (5G, fiber optics, etc.) and the integration and restructuring of Sprint. The sufficiently solid liquidity position in conjunction with good access to the markets and its strong resilience, compared with other industries, to the negative effects of the COVID 19 pandemic will enable Deutsche Telekom AG to meet the existing challenges adequately and develop its business as planned while maintaining stable balance sheet ratios.
Creditreform Rating has confirmed the unsolicited corporate issuer rating of Deutsche Telekom AG at BBB+. The outlook is stable. The rating translates to a highly satisfactory creditworthiness. Key factor for the assessment is the operational and financial capacity which derives from a sustained positive business development despite a high intensity of competition and the fast moving and capital intensive business. The capital market capability which has been proved over the years acts as a stabilizer as well. The positive turnover and result trend of this year compensates the weaker annual result of 2018, but the increased financial indebtedness has a dampening effect on the rating. The group, which is one of the leading global telecommunication companies, should be able to deal with the operative and financial challenges connected to the 5G network expansion and the planned merger of TMUS and Sprint.
Creditreform Rating has set the unsolicited corporate rating of Deutsche Telekom AG to BBB+. The outlook is stable. The unsolicited BBB+ corporate rating attests Deutsche Telekom AG a highly satisfactory level of financial strength. Based on the contemporary business model the group has developed positively in 2016. Our financial ratio analysis shows a slightly positive trend for the group which, with regard to the structural measures, the investment activity, the solid financial position and the capital market viability as well as the competitive standing, determines the rating level. On the other hand, significant risks arise from the market and competitive field, the regulated environment, the fast-moving market, the capital intensity and the technological challenges. We assume that Deutsche Telekom will be equal to those challenges provided that the business development remains at least stable and the financial solidity can be maintained.