S&P rates Telecom Argentina notes B-

Standard & Poor's said it assigned its B- rating to the $1.9 billion of new debt to be issued by Telecom Argentina SA as part of its debt restructuring process, including series A notes with final maturity in October 2014 for up to the equivalent of $877 million and series B notes with final maturity in October 2011 for up to $995 million.

These figures are calculated using exchange rates as of Aug. 4, 2004.

On May 26, the company obtained a court endorsement to restructure its financial debt under an out of court agreement (acuerdo preventivo extrajudicial). According to Argentine bankruptcy law, after the judiciary homologation of the APE, which was approved by 94.4% of creditors, the agreement is also binding for lenders voting against it.

"Standard & Poor's does not foresee any material risk to the completion of the exchange," said S&P credit analyst Ivana Recalde. "Once the APE is completed, Standard & Poor's expects to raise TECO's local and foreign currency long-term corporate credit ratings to B- from D, where they were placed on April, 2, 2002 and, since none of the defaulted debt will remain unpaid, to withdraw its issue ratings on the debt that is currently in default."

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