Moody's lowered Inmarsat PLC's corporate family rating to Ba2 from Ba1 and its probability of default rating to Ba2-PD from Ba1-PD.
The rating agency also downgraded the ratings on Inmarsat Finance PLC's $1.0 billion senior unsecured notes due 2022 and $400 million senior unsecured notes due 2024 to Ba3 from Ba2. The outlook on the ratings is stable.
"The downgrade of Inmarsat's ratings reflects our expectation that over 2018 and 2019, Inmarsat's leverage and free cash flow will continue to be weak vis-a-vis the thresholds for the existing Ba1 rating due to its sizable capex program, the anticipated loss of a high-margin revenue stream from Ligado and EBITDA margin dilution in its high-growth Aviation segment," Alejandro Núnez, a Moody's vice president — senior analyst and lead analyst for Inmarsat, said in a March 14 statement.
Núnez, however, said the company's decision to considerably reduce its dividend payout and maintain its net leverage policy is viewed positively.
