Moody's has upgraded Helios Towers' rating to Ba3 with a stable outlook.

Investing.com – Moody’s on Friday upgraded the corporate family rating of Helios Towers plc from B1 to Ba3. The agency also upgraded the probability of default rating from B1-PD to Ba3-PD, and the rating on the $850 million 2029 senior unsecured notes issued by HTA Group, Ltd. from B1 to Ba3. The outlooks for both entities were revised from positive to stable.

The upgrade reflects an improvement in Helios Towers’ credit profile, driven by solid operational performance, increasing free cash flow generation, and ongoing deleveraging commitments. In November 2025, the company announced a shareholder distribution policy, indicating expectations that free cash flow will remain sustainable in the medium term. This policy shift aligns with the revised net leverage target, which is now a reporting-based range of 2.5x to 3.5x, down from the previous range of 3.5x to 4.5x.

Moody’s also upgraded the company’s ESG Governance issuer profile score from G-3 to G-2, and the credit impact score from CIS-3 to CIS-2, citing the updated financial policy as evidence of strengthened governance capabilities.

Building on Moody’s adjustments, the company’s debt-to-EBITDA ratio is expected to decline from 4.8x as of December 2024 to 4.5x over the next 12 months ending June 2025. During the same period, the company generated $46 million in Moody’s-adjusted free cash flow. Moody’s expects that by the end of 2025, the adjusted debt-to-EBITDA ratio will decrease to approximately 4.2x, and by the end of 2026, to about 3.9x, while maintaining positive free cash flow generation.

The rating reflects Helios Towers’ leading position in seven high-growth African telecom tower markets and its presence in two additional countries. The company has a strong track record of growth, improving profitability, and contract cash flows supported by long-term agreements with leading mobile network operators. The average remaining contract term is 6.8 years, representing $5.3 billion in future revenue. These contracts benefit from automatic price adjustment mechanisms related to power costs, inflation, and foreign exchange devaluation.

The rating is constrained by the high-risk sovereign environments in which the company operates, particularly Tanzania (rated B1 stable) and the Democratic Republic of the Congo (rated B3 stable), which together account for approximately 38% and 32% of EBITDA, respectively.

The stable outlook reflects Helios Towers’ good track record of adhering to its financial policies and the expectation that the company will continue generating free cash flow, maintaining solid credit metrics, and sufficient liquidity.

Helios Towers’ rating is limited by the sovereign ratings of its key operating countries, especially Tanzania and the Democratic Republic of the Congo. Unless the sovereign ratings of these countries improve, further upgrades of Helios Towers are unlikely. For an upgrade, Moody’s expects the adjusted debt-to-EBITDA ratio to sustainably improve below 3.5x, and EBITDA minus capital expenditures divided by interest expenses to remain stably above 2.0x.

If the sovereign credit quality of key markets deteriorates significantly, or if the company’s ability to regularly remit cash to the parent company is restricted, Moody’s may consider a negative rating action. Additionally, if the adjusted debt-to-EBITDA ratio fails to improve below 4.0x, and EBITDA minus capital expenditures divided by interest expenses does not consistently approach 2.0x, downward pressure could also occur. Persistent negative free cash flow and weakening liquidity could further lead to a downgrade.

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