Moody's may cut Telemig Celular

Moody's Investors Service said it placed under review for possible downgrade the B2 foreign-currency rating of the $120 million senior unsecured notes units issued by Telemig Celular SA and Amazônia Celular SA.

The action reflects Amazônia's overall deteriorated credit metrics as a result of weakened operating margins and increased competitive pressures, as well as Moody's concerns regarding the company's tightened liquidity position due to a substantial concentration of debt maturity in the short term.

The rating assigned to the notes is principally based on the credit quality of Amazônia because 33.3% of the debt service of the notes units will depend on payments from Amazônia and are not guaranteed by Telemig, which has a stronger credit profile, the agency said.

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