Fitch upgrades Cablemas

Fitch Ratings said it upgraded Cablemas, SA de CV's local-currency issuer default rating to BB from BB-, foreign-currency issuer default rating to BB from BB- and national scale long-term rating to A+(mex) from A(mex).

The outlook is stable.

Fitch upgraded Cablemas' $175 million 9 3/8% coupon senior notes due in 2015 to BB from BB-.

The upgrade reflects Cablemas' improved financial profile as a result of an increase in homes passed and subscriber base, which in turn is reflected in continued growth in revenues and EBITDA, according to the agency.

Total debt to EBITDA is expected to remain between 1.5 times and 2.0x in the medium term.

Balanced against these factors is the company's historically negative free cash flow generation, which is expected to become neutral or slightly positive in the future, as well as the competitive business environment where it operates, the agency noted.

Cablemas' ratings are based on its solid operating network, geographically diverse subscriber base, stable financial position, increasing competition and continued negative cash flow generation, the agency said.

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