Moody's Ratings on Friday upheld Telenor ASA's Baa1 senior unsecured ratings and simultaneously revised the outlook to positive from stable, saying the change reflects sustained deleveraging tied to better operating results in the Nordics and anticipated debt reduction financed by proceeds from the sale of Telenor's Thailand operations.
The agency also reaffirmed the company’s senior unsecured Euro Debt Issuance Programme rating at (P)Baa1 and its Prime-2 short-term commercial paper rating. Moody’s left Telenor’s Baseline Credit Assessment unchanged at baa2.
Moody’s said the Baa1 rating includes a one-notch uplift stemming from the company’s ownership links to the Norwegian government, a factor that supports the firm’s stand-alone credit profile.
"Today’s rating action reflects the company’s ongoing deleveraging, driven by improved operating performance in the Nordics and the expected debt repayment from part of the cash proceeds from the sale of its Thailand unit," said Luigi Bucci, a Moody’s Ratings VP-Senior Analyst and lead analyst for Telenor.
Moody’s flagged continuing pressure on dividend coverage for 2026, with the possibility that this pressure extends into 2027. The agency also highlighted elevated M&A risk, noting Telenor’s expressed interest in participating in consolidation activity within the Nordics.
Allocation of True proceeds
Telenor has allocated a total of NOK39 billion in proceeds from the disposal of its stake in True Corporation Public Company Limited. Management intends to use NOK15 billion for share buybacks over a three-year period, NOK11.5 billion for debt repayment, and NOK6 billion to fund the acquisition of GlobalConnect Group’s consumer business in Norway. The remaining NOK6.5 billion is earmarked for potential M&A or could be redirected to additional shareholder distributions if suitable opportunities do not materialize.
Moody’s expects the cash-funded purchase of GlobalConnect’s Norwegian consumer unit to have a broadly neutral effect on leverage.
Forecasts and credit metrics
Based on preliminary financials and the planned use of sale proceeds, Moody’s projects adjusted leverage, measured as adjusted debt/EBITDA, to fall to around 2.5x-2.6x in 2026-27, down from 2.9x in 2025. The agency also anticipates adjusted RCF/net debt to rise to approximately 20%-21% in 2026-27, up from 18% in 2025, supported by planned debt reductions and continued EBITDA growth in the Nordic markets.
Moody’s noted that free cash flow after dividends is expected to be break even at best through 2027, reflecting elevated shareholder distributions and other cash demands. Operational issues in Bangladesh were singled out as a continuing challenge for the company.
Liquidity and maturities
Liquidity at Telenor is underpinned by NOK16.3 billion in cash and cash equivalents as of December 2025 and full availability of its €1.8 billion committed revolving credit facility, which matures in June 2030. The company faces maturities of NOK11.8 billion in 2026 and NOK7.4 billion in 2027. Moody’s expects the euro-denominated bond that matures in May 2026 to be repaid with cash.
Outlook drivers and rating sensitivities
Moody’s said the positive outlook reflects its expectation that adjusted debt/EBITDA will fall below 2.75x over 2026-27 and that Telenor will preserve sound liquidity without straying from its current financial policy. Moody’s assessment does not include any new M&A beyond the agreed GlobalConnect deal.
The agency set out scenarios that would prompt a return to a stable outlook: higher-than-expected leverage, weaker operating performance, debt-funded acquisitions, or a shift toward a more aggressive financial policy.
Conversely, upgrades would be considered if adjusted RCF/net debt moved toward 22% on a sustained basis and adjusted debt/EBITDA fell consistently and comfortably below 2.75x. Downgrades could occur if adjusted RCF/net debt dropped below 17% with little prospect of improvement or if adjusted debt/EBITDA stayed above 3.25x on a sustained basis.
Positioning and constraints
Moody’s assessment reiterates Telenor’s standing as the incumbent integrated telecom operator in Norway with a significant footprint across Scandinavia and exposure to Nordic market conditions. These competitive strengths are counterbalanced by the company’s high shareholder distributions, ongoing operational headwinds in Bangladesh, and heightened M&A risk tied to its strategic intent in the Nordics.
Overall, Moody’s maintained a cautious but improving view of Telenor’s credit picture, linking future rating moves to measurable changes in leverage, cash flow generation, liquidity and adherence to current financial policies.