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Singtel Optus 'A/A-1' corporate credit ratings affirmed, standalone credit profile revised to 'bbb+'
SINGTEL Optus' corporate credit ratings stands at "A/A-1" with a stable outlook, as affirmed by S&P Global Ratings on Friday.
But the standalone credit profile of the Australia-based telecommunications company was revised to "bbb+" from "a-".
S&P Global Ratings report said: "Optus' credit metrics for the year ended March 31, 2017, are weaker than our expectations and we do not expect the credit metrics to be restored over the next couple of years."
The report also said that competition in the Australian telecommunications sector remains intense, with the entry of TPG Telecom as Australia's fourth mobile network operator further intensifying competition among operators.
However, Optus' ongoing investment in its 4G network and product offering is expected to underpin its market position in mobile services. The National Broadband Network should also provide Optus with opportunities to enhance its product offering, particularly through bundling, the report said.
The rating on Optus reflects S&P Global Ratings' assessment that Optus remains a core subsidiary of the Singapore Telecommunications (Singtel) group.
Responding to the report, Singtel said in a SGX filing on Friday: "At A/Stable, Optus' corporate credit rating by S&P Global Ratings continues to be strong among its peers in the global telecommunications industry.
"It remains financially disciplined in its approach to investments and is committed to maintaining an investment-grade credit rating."