Fitch Revises Outlook on IHS Holding to Positive
Fitch Ratings has revised the Outlook on IHS Holding Limited’s (IHS) Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at ‘B+’.
According to the rating note, the positive outlook on IHS reflects Fitch’s expectation that cash flow from the company’s operations-capex/debt (excluding pre-contracted capex) could sufficiently improve over the next two to three years to above the 5% threshold for the rating.
The improvement, according to Fitch, is likely to be driven by organic earnings before interest tax depreciation and amortisation (EBITDA) growth, lower interest and capital expenditure costs.
“Ongoing improvements in financial flexibility and discretionary capacity, alongside maintained adequate headroom within the rating parameters to absorb any potential FX pressure on leverage or renewal risk, will be key for a potential upgrade”, Fitch said.
IHS’s rating is supported by its leading market positions, a high proportion of long-term contractual revenues, and moderate leverage, which together provide stability and resilience.
The IDR remains constrained by the significant EBITDA contribution from its Nigerian operations, which alongside other emerging markets exposure, increases cash flow and leverage risks.
“We expect Fitch-defined net leverage to decline to 3.0x by end-2025 from 3.6x at end-2024, well below our upgrade threshold of 4.5x”.
Ratings analysts said this will be driven by EBITDA growth in Nigeria, proceeds from the sale of operations in Kuwait and Rwanda and lower capex.
IHS targets 3.0x-4.0x leverage, but analysts said they expect it to manage this towards the lower end, maintaining sufficient headroom to absorb FX fluctuation risks not mitigated by contractual escalators.
It is noted that leverage reduction remains a strategic priority for IHS, supported by organic cash generation, disciplined capex management, and proceeds from strategic disposals.
IHS started a strategic review in March 2024 to explore options for shareholder value creation, with the plan focussed on improving free cash flow (FCF) and involving the disposal of non-core assets to raise between USD500 million and USD1 billion.
The company divested its assets in Kuwait in December 2024 and completed the disposal of its Rwanda operations in October 2025 as part of broader efforts to boost balance sheet position.
IHS has indicated that excess proceeds from the strategic initiatives would be used to prioritise debt reduction, which ratings analysts consider credit positive.
“The company could return cash to shareholders, but we assume it would follow a disciplined approach to capital allocation and maintain sufficient headroom under the rating”, Fitch said.
Ratings analysts explained that the portfolio has reduced geographical diversification following these strategic disposals.
Fitch said IHS has robust financial flexibility to scale back discretionary investment or pursue asset sales. The company maintains significant cash balances and undrawn committed credit facilities, providing ample headroom to meet debt maturities and support capex.
This is supported by access to capital markets, diversified funding sources, and prudent liquidity management. IHS has a staggered debt maturity profile, reducing refinancing risk, and a proactive approach to liability management.
IHS’s total contracted revenue, adjusted for all tower master lease agreements with MTN Nigeria, was renewed and extended in 2024 until 2032.
The contracts with MTN Nigeria include rebased financial terms, and a Nigerian naira component, US dollar component and a new component linked to the cost of diesel power.
The company also introduced power pass through in the contracts with MTN in South Africa. The company has renewed contracts with Airtel in Nigeria until 2031 and Zambia until 2035. These renewals account for about 72% of the company’s contracts at end-2024.
About 60% of the company’s 9M-2025 revenue was generated in Nigeria, which analysts assess as having high operating environment risk, as reflected in its ‘B’ sovereign rating.
Fitch considers the ratings of corporates operating in these markets as constrained by the sovereign rating even in the absence of transfer and convertibility risks.
“We believe fragile economic structures and uncertain regulation may negatively affect IHS’s business profile. Our rating thresholds for IHS are therefore tighter than for peers operating in developed markets”, Fitch said.
About 85% of the company’s debt is US dollar denominated, while only about 60% EBITDA is covered. Fitch analyst estimate that new cash flow (EBITDA used as proxy) generated by IHS in countries with a higher Country Ceiling than that of Nigeria (B) is insufficient to cover gross interest expenses in hard currency.
IHS’s Long-Term Foreign-Currency IDR is one notch higher than the Country Ceiling of ‘B’, reflecting structural enhancements. This is based on our expectation that any balance-of-payments crisis would be fairly short, and hard currency-denominated debt could be serviced with offshore liquidity resources.
“We expect cash flow generation and offshore readily available cash and committed credit facilities to cover at least 24 months of hard-currency debt servicing by over 1.5x”.
IHS operates across emerging markets that have sparser network footprints than in Europe and are typically under-penetrated in both mobile users and high-speed technologies such as 4G and 5G.
At the end of 2024, 4G availability across IHS’s markets was about half of that in Europe, while 5G penetration was just 3%.
These rates will continue to move towards European levels, which together with continued population growth will drive operators to invest in network capacity and spur expansion for IHS.
Ratings analysts said however, higher-speed technologies will require network densification to be effective. IHS benefits from favourable industry dynamics, high barriers to entry, and long-term contracts with periodic escalators, supporting revenue stability and visibility.
Ongoing 4G/5G rollouts and rising mobile data demand underpin medium-term growth prospects across the company’s footprint. IHS expects Nigeria and Brazil to be drivers of further growth.
It has a new build-to-suit agreement with TIM S.A. to build up to 3,000 sites, with an initial deployment of 500 sites. GTCO Delivers 52% Gain in 11-Month Amidst Earnings Pressure
