Fitch Upgrades Telefonica Argentina

Fitch has upgraded Telefonica de Argentina’s (TASA) local currency issuer default rating to BB from BB minus. The agency also upgraded the company’s national scale rating to AA+ from AA minus, and raised approximately $474 million in local bonds a BB minus from B+. Fitch affirmed the company’s foreign currency rating at B+. “TASA’s rating actions reflect stronger financial profile, solid business position in the Argentine telecom sector, healthy cash flow generation and a manageable debt maturity profile,” says the agency. “The ratings incorporate a level of implicit support from controlling shareholder Spain’s Telefonica, which has provided flexibility in the form of intercompany loans in previous years.” Of risk to TASA’s ratings are currency mismatch between revenues and indebtedness, regulatory risk and increased competition from wireless services.