Fitch keeps Crown Castle's 'BBB+' IDR on rating watch negative

Fitch keeps Crown Castle's 'BBB+' IDR on rating watch negative

Fitch Ratings has maintained Crown Castle Inc.’s (NYSE: CCI) Long Term Issuer Default Rating (IDR) of ’BBB+’ on Rating Watch Negative (RWN) amid its planned $8.5 billion sale of the fiber business to Zayo Group Holdings Inc. and EQT Active Core Infrastructure fund. The transaction, expected to close by mid-2026, will reduce CCI’s revenue diversification and scale, as the fiber segment accounts for approximately one-third of its total revenue and 26% of operating profit. Fitch anticipates the sale will elevate CCI’s leverage to 6.0x–6.5x post-transaction, prompting a likely downgrade of its IDR to ’BBB’ once the deal finalizes.

The company plans to allocate a significant portion of the proceeds to debt repayment and a $3 billion share buyback program, while reducing its annual dividend by 32% to $4.25 per share starting in 2Q25. Fitch notes that CCI’s updated leverage targets and aggressive focus on shareholder returns increase short-term credit risk, though the towers-only business model is expected to deliver higher EBITDA margins and reduced capital expenditures compared to its fiber operations.

While the transaction reduces exposure to lower-margin fiber assets, it also limits revenue diversification. Fitch projects towers revenue growth in the low to mid-single digits post-transaction, supported by long-term lease contracts and 5G infrastructure demand. The rating agency will resolve the RWN status upon transaction closure, with further downgrades contingent on sustained leverage above 5.5x or margin pressures. CCI’s U.S.-focused tower operations remain a stabilizing factor, contrasting with peers like American Tower (BBB+/Stable) and Cellnex Telecom (BBB−/Stable), which face varying leverage and market risks.