Moody’s Lowers Axtel

Moody’s has downgraded Mexico’s Axtel to Caa2 from Caa1, it says, based on a poor liquidity position. The telecom’s low level of cash on hand as of midyear, MXP694m, casts doubt on its ability to face working capital needs and about MXNP450m in interest payments on its bonds. “While earnings and cash flow have been impacted by declining revenues from long distance services, working capital needs have been above trend mostly due to slow collection of receivables from certain government entities,” the agency says. The outlook is negative.