Moody's rates new Telemig notes B2

Moody's Investors Service said it assigned a B2 rating to the $70 million in notes due 2009 issued by Telemig Celular SA and the $30 million in notes due 2009 issued by Amazônia Celular SA.

This is the first time Moody's is rating an obligation issued by Telemig or Amazônia, leading regional providers of mobile communications services in Brazil. The rating outlook is stable.

Moody's said the B2 rating assigned to the notes units is principally based on the credit quality of Amazônia and is not constrained by the convertibility risk implied by Moody's Brazil country ceiling for foreign currency bonds and notes of B2.

The rating reflects the credit quality of Amazônia because 30% 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 rating is supported by Telemig and Amazônia's leading market share position, strong brands and unequaled network coverage in their concession areas. Cash flow-based debt protection measures at both companies are above-average for the rating category and also provide support. Finally, the rating is supported by expected continued market growth in the concession areas of both Telemig and Amazônia.

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