S&P upgrades Axtel

Standard & Poor's said it raised its ratings on Mexico's Axtel SA de CV, including local and foreign currency corporate credit ratings to B+ from B and the company's $250 million senior notes due 2013 to B+ from B.

The outlook was revised to positive from stable.

The ratings reflect the continued growth of Axtel's operations without challenging its financial profile in terms of debt, its broad telecommunications products portfolio, a flexible and advanced network, a convenient capital structure due to its vendor-debt renegotiation in early 2003, improving financial performance and experienced equity partners, the agency said.

S&P said tempering factors include strong competition from Mexico's telecommunications incumbent and from the mobile telephones and a perceived growth appetite that could result in additional debt-funded investments, a risk that persists given that Axtel's recent growth has not translated into debt-related ratios weakness or higher debt.

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