Moody's confirms Alestra's B1 ratings, changes outlook to negative

Friday, June 10, 2011

Moody's confirmed Mexican mobile operator Alestra's B1 corporate family rating, but changed the outlook to negative, the rating agency said in a report.

This concludes a ratings review after the announcement that AT&T agreed to sell its 49% share of Alestra to JV partner Alfa (BMV: ALFA). Alfa previously said the move will support its growth strategy, while strengthening Alestra's operations.

Moody's also confirmed Alestra's B1 rating on US$200mn in senior unsecured notes due 2014, with a negative outlook.

Start your 15 day free trial now!


Already a subscriber? Please, login

The outlook considers the loss of AT&T's business and support, which will have a negative impact on Alestra's revenues, margins and cash flow, though this pressure will be mostly felt in 2012.

Alestra's ratings are supported by the company's solid operating margins and strong customer base, focused on the enterprise segment.

The company's revenues were down 0.3% in the 12 months ended March 31, mostly due to lower long distance revenues driven by reduced traffic. Data revenues, the growth driver, increased 8% in the same period. Lower operating costs helped the company post an adjusted Ebitda margin of close to 35.50% during the 12 months, up from 32.72% in 2010.

Use this link to view Moody's full report.