Moody's confirms Embratel at Baa3

Moody's Investors Service said it confirmed the local currency issuer rating and foreign currency senior unsecured rating of Empresa Brasileira de Telecomunicacões SA (Embratel) at Baa3, but downgraded its Brazilian national-scale issuer rating to Aa1.br from Aaa.br.

The agency said that the confirmation of Embratel's Baa3 rating is based on its view that Embratel will remain of key strategic importance to Telmex Internacional and its shareholders as the main conduit for its growth strategy in Brazil.

According to Moody's, the downgrade of the Brazilian national-scale issuer rating reflects the reduced expectation with regard to the probability of support from Telefonos de Mexico, SA de CV's (A2 global local currency rating / stable), after it decided to spin-off all its Latin American businesses and its Mexican yellow pages business to a new holding company named Telmex Internacional.

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