Moody's might drop America Movil

Moody's Investors Service said it placed all A2 and A3 senior unsecured domestic and foreign currency ratings of America Movil plc and related guaranteed rated entities on review for downgrade.

Concurrently, Moody's de Mexico affirmed America Movil's Aaa.mx long-term national scale and MX-1 short-term national scale ratings.

Moody's said the action follows the announcement that America Movil intends to make a voluntary tender offer in cash for all of the issued and outstanding shares of Koninklijke KPN NV at a price of €2.40 per share or €7.2 billion ($9.16 billion).

"Placing America Movil's ratings on review for downgrade reflects our view that the potential benefits of controlling KPN could be outweighed by the heightened operational challenges and financial debt burden resulting from a successful completion of this transaction," Soummo Mukheree, Moody's vice president, senior credit officer and lead analyst for America Movil said in a news release.

"This is a sizeable transaction for America Movil, which if funded with debt, clearly puts its leverage, as measured by Total Debt to Adjusted EBITDA above our 1.5 times threshold for the A2 rating category."

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