Moody's affirms Televisa's ratings after Iusacell investment announcement

Monday, April 11, 2011

Moody's has affirmed Mexican broadcast giant Grupo Televisa's Baa1 and Aaa ratings with a stable outlook, after the company announced its up to US$1.6bn investment for a 50% stake in mobile operator Iusacell, according to a press release from the ratings agency.

The investment's size and structure do not affect Televisa's current ratings, because the company had set aside cash for long-term strategic investments; as such, the transaction does not compromise the group's future cash flows, Moody's said.

The ratings agency considers the investment strategically beneficial in the long term, providing Televisa with business opportunities in the mobile telecoms industry. Moody's said the investment is expected to allow Televisa to leverage its infrastructure and launch the first major quadruple play services package in Mexico.

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Moody's VP and senior analyst Nymia Almeida said the agency will continue monitoring any future investments, as they could jeopardize Televisa's business or credit profile beyond normal levels.

Further investment activities could put pressure on the ratings, and a downgrade could occur if the company's core television broadcasting, pay-TV systems or telecom businesses lead to credit metrics inconsistent with the current rating category. Ratings will also suffer if Televisa's cash on hand falls below US$1bn.

Use this link to see Moody's full report.