Moody's eyes VTR for upgrade

Moody's Investors Service said it placed VTR Finance NV’s Ba3 corporate family rating under review for upgrade. The agency also placed under review for upgrade the B1 rating of VTR's $550 million of 6 3/8% senior unsecured notes and the Ba3 rating of VTR Comunicaciones SpA's $410 million of 4 3/8% senior secured notes and $480 million of 5 1/8%senior secured notes.

The outlook was changed to under review from stable.

The decision to review follows the announcement on Wednesday that America Movil, SAB de CV and Liberty Latin America reached an agreement to combine their operations in Chile, Claro Chile and VTR respectively, in a joint venture that will be 50/50 owned by Liberty and America Movil, Moody’s said.

“The ratings could be upgraded if the JV's resulting business profile is approved as proposed with high profitability including synergies and strengthening its market position in Chile in fixed broadband and pay TV. Management expects the new company to operate with a net leverage target between 2.8x and 3.5x, which positively compares to VTR's current net leverage of 5.1x as calculated in accordance with the indenture of VTR's 6 3/8% $550 million senior unsecured notes,” the agency said in a press release.

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