Fitch affirms Telemovil

Fitch Ratings said it affirmed the local- and foreign-currency issuer default ratings of Telemovil El Salvador, SA and Telemovil Finance Co. Ltd., including the $450 million senior notes due 2017 issued by Telemovil Finance and guaranteed by Telemovil at BB.

The outlook is stable.

Telemovil's ratings reflect diversified service offering and platforms, leading positions in mobile and pay television services in El Salvador, strong brand recognition, extensive network coverage, sound financial profile and positive pre-dividend free cash flow, the agency said.

Credit quality is tempered by intense competition, limited geographic diversification and the dependence of the economy on remittances, which affects demand for telecommunications services, the agency noted.

Ratings also factor in the relationship with parent company Millicom International Cellular, which owns and runs Telemovil, and benefit from synergies related to the larger scale of the parent, expertise in management but also considers the payment of dividends, loans to affiliates and Millicom's financial position, Fitch said.

Pro forma total debt to EBITDA and net debt to EBITDA are about 2.3 times and 1.5x, respectively.

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