Fitch upgrades Grupo Televisa

Fitch Ratings said it upgraded Grupo Televisa, SAB's local- and foreign-currency issuer default ratings to BBB+ from BBB, national scale rating to AAA(mex) from AA+(mex), dollar-denominated senior notes to BBB+ from BBB and Ps. 3 billion medium-term notes due 2007 to AAA(mex) from AA+(mex).

The outlook is stable.

The agency said the upgrade reflects Grupo Televisa's continued strong business profile, improved credit fundamentals, solid free cash flow generation and strong liquidity profile. Televisa is the largest media company in the Spanish-speaking world and the largest television broadcasting company in Mexico.

Credit fundamentals have improved due to higher profitability margins resulting from growing advertising revenues, higher programming fees from Univision and the implementation of a successful cost-containment program, Fitch said, and the total-debt-to-EBITDA ratio has decreased to 1.2x from 2.2x in 2005.

Grupo Televisa's TV broadcasting business is in a mature stage and will grow at similar rates as domestic GDP, but the agency said the company will continue to benefit from its strong position in the Mexican advertising market and is developing new business lines in order to diversify its growth strategy.

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