S&P rates Telecom Personal notes B-

Standard & Poor's said it assigned a B- corporate credit rating to Telecom Personal SA and a B- senior unsecured debt rating to its new note issue for up to $300 million with bullet maturity in 2010.

The outlook on the corporate credit rating is stable.

Proceeds will be used to refinance existing debt.

The ratings on the company reflect the close linkage of Telecom Personal's credit quality to that of its parent, Telecom Argentina SA (B-/stable), due to the fact that Telecom Personal constitutes the growth vehicle for Telecom Argentina, the agency said.

The ratings on Telecom Personal also reflect its aggressive capital structure and the challenges of operating in the Argentine environment, high competition in the mobile segment and currency mismatch risks, as most of its cash generation is in Argentine pesos, while financial debt and some operational costs are foreign currency-denominated, the agency said.

In contrast, the company's relatively good competitive position, as one of three mobile players in Argentina, and the financial improvements after the closing of the restructuring of its financial debt (in November 2004) partially mitigate the mentioned negative factors, the agency said.

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