February 11, 2013 / 9:31 AM / 5 years ago

Fitch affirms Telecom Italia rating on capital boost plan

MILAN, Feb 11 (Reuters) - Fitch Ratings confirmed its “BBB” long-term issuer default rating on Telecom Italia on Monday, with outlook negative, citing the company’s plans to halve dividends and issue bonds to bolster the company’s capital.

“The company’s intention to strengthen the balance sheet by halving shareholder dividends and issuing 3-billion-euro of hybrid bonds in the next 24 months partly offsets the weaker than expected domestic performance,” Fitch said in a statement.

“Management has shown it is committed to reducing leverage but Fitch is concerned that Telecom Italia will have fewer debt reduction options in future to address further deterioration in the business, whether due to continued regulatory and competitive pressure or a weaker economy,” the agency said.

Reporting by Antonella Ciancio; editing by Francesca Landini

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