S&P affirms Telmex

Standard & Poor's said it affirmed its BBB+ long-term corporate credit and senior unsecured debt ratings on Teléfonos de Mexico SAB de CV (Telmex).

The outlook is stable.

The agency said that the rating action follows the issuer's announcement that its shareholders have approved the spin-off of Telmex Internacional.

"We do not believe the operation will have an immediate impact on the issuer's creditworthiness given its solid credit metrics and the concentration of its free operating cash flow generation in its Mexican operations." said S&P credit analyst Jose Coballasi.

Pro-forma for the proposed acquisition, Telmex's EBITDA interest coverage, total debt-to-EBITDA and funds from operations-to-total debt ratios for the first nine months of 2007 were around 7.8x, 2.0x and 34.7%, respectively, the agency noted.

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