S&P downgrades Cell C to its worst rating after default
The rating agency has given the cellphone network’s senior secured bonds a ‘D’, sending it deeper into junk territory
Cell C missed interest payments in January, and has been slapped with a "D" for default rating by S&P Global Ratings. S&P said in a statement on Tuesday morning that it was cutting the rating on Cell C’s €400m worth of senior secured bonds from "CC" — shorthand for "default imminent with little prospect for recovery " — to "D" because it had failed to pay lenders by the due date. D is the worst credit rating S&P issues. Cell C is in the process of reducing its debt by selling shares to Blue Label Telecoms. The last announcement on this proposed deal was in November when Blue Label said it would cut Cell C’s debt to about R6bn. Part of Cell C’s woes are due to the government’s regulator, the Independent Communications Authority of SA (Icasa). S&P noted that when Vodacom wanted to buy Neotel, the deal collapsed because Icasa refused to allow the new owner to take over Neotel’s broadcasting spectrum. Blue Label Telecoms is likely to face the same red tape, making Cell C’s bankruptcy a ...
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