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Omantel Upgraded to Ba1 by Moody’s
September 19, 2024
Oman Telecommunications (Omantel) was upgraded by a notch to Ba1 from Ba2 by Moody’s. The rating agency also upgraded the sukuk issued by OTEL Sukuk Limited by a similar notch to Ba1. The upgrade reflects the stable financial performance shown by the company amid the intensified competition since 2022 and strengthening of credit metrics. For instance, Omantel’s gross leverage reduced to 3.3x in 2023 from the average of 3.6x in 2019-22 period and is expected to around 3.2x in 2024-25. The upgrade further acknowledges the company’s consistent adherence to prudent financial policies and its proactive measures to manage leverage effectively. Oman Tel has also seen an enhancement in its liquidity position. Its cash balance of OMR 34mn ($88.3mn) and operating cash flows of OMR 260mn ($675.4mn) through 2025 will be sufficient to cover its capital expenditure, dividends and debt payments over the same period, according to Moody’s. In addition, the company has very modest upcoming debt maturities until 2028.
Its’ 6.625% 2028s traded stable at 105.4 cents on the dollar, yielding 4.97%.
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