Moody's lifts Telecom Italia rating with cash generation in sight

Moody's on Thursday raised Telecom Italia's (TIM) TIT credit rating by one notch to Ba2 with a stable outlook, citing expectations for Italy's biggest telecoms group to return to cash generation in the 2025-2026 period.

The rating upgrade followed TIM's sale last year of its prized fixed-landline network to a consortium led by U.S. investment firm KKR, in a move that slashed the former phone monopoly's debt pile by 14 million euros ($15.65 million).

"We expect the company to generate positive free cash flow over 2025-26, which, coupled with debt repayment, will drive further deleveraging," said Moody's analyst Ernesto Bisagno.

Moody's stripped TIM of its investment grade status in 2013. After Thursday's upgrade, TIM remained two notches below Moody's investment grade status.

($1 = 0.8944 euros)