Moody’s Mulls Cablemas’ Upgrade

Moody’s has put Mexican cable operator Cablemas’ B1 corporate family rating on review for possible upgrade, pending regulatory approval for a 49% equity acquisition by Televisa. “Televisa will shortly become an important shareholder of Cablemas with a 49% or higher stake at its holding company, Alvafig,” says Moody’s senior analyst Nymia Almeida. Televisa may soon also convert a loan to Cablemas’s holding company into equity to take hold of Cablemas network. Moody’s ratings on Cablemas continue to reflect a tight liquidity position, lack of free cash flow, strong dependence on debt to finance building out the network and pressure on operating margins caused by high churn, at 2.5% for video services and 4.3% for broadband services as of September 2007. The review affects a $175m issue of 9.375% senior unsecured global notes due 2015.