Fitch Turns Negative on TGI, Affirms Telefonica

Fitch has affirmed TGI’s foreign and local currency issuer default ratings at BB and cut its outlook to negative from stable. The cut reflects the weakening prospects for Argentina’s TGI to reduce debt leverage over the near to medium term as originally expected, says Fitch. TGI has $750m of outstanding senior unsecured notes due 2017. Fitch says that TGI’s leverage level is 4.2x Ebitda of $215m. Elsewhere, Fitch says Telefonica Chile’s outlook is stable, citing strong liquidity position, cash flow and manageable debt maturity. The agency believes the company, which is 97% owned by Spain’s Telefonica, will generate cash flow of $100m to $150m over the next few years. It also expects total debt to Ebitda to remain stable at or below 2.0x. Fitch also affirmed the company’s local and foreign currency issuer default rating at BBB+.