Fitch gives BB+ to Vrio, notes

Fitch Ratings said it assigned long-term foreign and local-currency issuer default ratings of BB+ to Vrio Corp.

The outlook is stable.

The agency also assigned an expected BB+(EXP) rating to the company's proposed senior notes issuance of up to $1.5 billion, to be issued by subsidiaries Vrio Finco 1 LLC and Vrio Finco 2 Inc.

Vrio is a wholly owned subsidiary of AT&T Inc., rated A-/rating watch negative. AT&T intends to launch an initial public offering (IPO) of Vrio shortly after the closing of the proposed notes issuance.

In addition, Fitch said Vrio's Brazilian operating subsidiary, Sky Servicos de Banda Larga Ltda. plans to enter into an up to $1 billion equivalent Brazilian real-denominated credit facility. The company plans to use the notes proceeds, together with the IPO proceeds and the Brazilian credit facility, to repay its existing debt and to pay dividends to AT&T.

Fitch said the ratings reflect Vrio's solid scale and market position as one of the largest pay-TV providers in Latin America and its diversified operational geographies, brand recognition, stable operational cash flow generation, as well as the agency’s expectation for the company to maintain a relatively conservative capital structure for the BB rating category.

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