Digi Communications rating affirmed by Fitch with stable outlook

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Digi Communications rating affirmed

Highlights

Digi Communications' Long-Term Issuer Default Rating affirmed at 'BB' with Stable Outlook by Fitch, citing expected negative free cash flow over the next three years.
Fitch forecasts EBITDA net leverage will stay above 3.0x rating threshold in 2026 and 2027 due to high capital expenditure, but expects deleveraging back to 3.0x in 2028.
Fitch projects Digi's revenue to grow 7% to 11% annually in 2026–2028, with EBITDA margins of 24% to 26% in Spain and 48% in Romania.

Rating rationale and expansion outlook

As reported by Fitch Ratings, the agency has affirmed Digi Communications N.V.'s Long-Term Issuer Default Rating at 'BB' with a Stable Outlook, while also affirming Digi Romania S.A.'s senior secured notes at 'BB+' and assigning a Recovery Rating of 'RR3'.

The rating continues to reflect expected negative free cash flow over the next three years, driven by international investments, partial ownership of networks outside Romania and comparatively weak profitability. Fitch says those constraints are partly offset by Digi's strong domestic market positions, broader geographic diversification and continued growth.

Fitch expects EBITDA net leverage to remain above the 3.0x negative rating threshold in 2026 and 2027, mainly because of sustained high capital expenditure. The agency says that investment should strengthen Digi's asset base and competitive position, supporting deleveraging back to 3.0x in 2028.

Romania cash flow supports Iberian growth

Digi has posted low double-digit growth over the past six years, and Fitch expects revenue to keep rising at 7% to 11% in 2026 through 2028 as the customer base expands in Spain and Portugal. That expansion increases exposure to higher-rated countries, although it also comes with lower margins than in the Romanian market.

Fitch expects company-defined EBITDA margins of 24% to 26% in Spain and flat to negative margins in Portugal in 2026 through 2028, compared with 48% in Romania. Over the longer term, the agency says lower margins could be partly offset by declining capital expenditure.

Our earlier coverage of Fitch’s downgrade of Hyde Housing Association outlined how weakening leverage metrics led to lower long-term and short-term issuer ratings, even as the outlook remained stable. We noted that the agency expected debt-to-EBITDA to stay elevated due to a sizable development pipeline and continued reinvestment across Hyde’s expanded asset base, partly supported by assumptions of UK government backing.

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