Moody’s rates Televisa notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to Grupo Televisa, SAB's proposed senior long-term unsecured notes for an amount of up to $1.2 billion.

Moody's de Mexico also affirmed Televisa’s Baa1/Aaa.mx issuer and senior unsecured ratings and changed the outlook to negative from stable.

Proceeds from the notes will be used to finance capital expenditures for the telecommunications division over the next 18 to 24 months.

Moody’s said the outlook change reflects the higher leverage ratio pro-forma to the issuance, above the range for its Baa1 credit rating, without expectations of significant reduction over the next 12 to 18 months. The negative outlook also captures possible difficulties in executing its pricing revision strategy on the advertising inventory; the expectations for negative free cash flow at least until 2018; and the risks of potential use of its large cash position for substantial M&A.

The Baa1 ratings are supported by Televisa’s strong competitive position in the Mexican television, consistent growth in its telecom segment and stable operating performance, the agency said.

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