Moody's: Axtel outlook negative

Moody's Investors Service said it affirmed Axtel, SAB de CV's Ba2 corporate family rating and revised the outlook to negative from stable.

The outlook change was based on business and competitive challenges putting pressure on the company's operating results, according to the agency.

Axtel's Ba2 ratings reflect low financial leverage for its rating category, solid interest coverage credit metrics and management's largely prudent financial policies, the agency said.

Constraining Axtel's ratings are its small revenue size as well as modest and volatile cash flow generation, the agency noted.

In addition, Axtel's ratings reflect the operating challenges arising from strong competition from incumbent Telmex and Cable TV operators as well as wireless substitution, Moody's said.

Axtel's stated leverage tolerance level is 3 times debt to EBITDA, which is above the current ratio of 2.6 times at June 30, adjusted for pension liabilities and operating leases.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.