S&P puts VTR ratings on watch

S&P said it placed VTR Finance NV’s B issuer rating, the B- rating on its senior unsecured notes and the B rating on VTR Comunicaciones SpA’s senior secured bonds on CreditWatch with negative implications.

In October, VTR Finance and Claro Chile merged and became a joint venture, which Liberty Latin America Ltd. and America Movil SAB de CV own equally.

“Although we think the JV could provide synergies between the two entities, we currently don't have clarity on the JV's business plan or financial policy, and it's unclear if the JV could benefit VTR's credit quality,” S&P said in a press release.

The agency noted, “We believe that without clear support stemming from the JV, there's at least a one-in-two likelihood that we could take a negative rating action on VTR within the next 90 days. This would result from pressured operating performance and cash flow and leverage metrics no longer commensurate with the current rating.”

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