Fitch Rates America Movil's GBP750MM Senior Notes 'A'

  Fitch Rates America Movil's GBP750MM Senior Notes 'A'

Business Wire

MONTERREY, Mexico -- August 03, 2012

Fitch Ratings has assigned an 'A' rating to America Movil, S.A.B. de C.V.'s
(America Movil) GBP750 million 4.375% senior notes due 2041. Proceeds from the
issuance are expected to be used primarily for debt repayment.

America Movil and its subsidiaries' ratings are supported by diversified fixed
and wireless operations across Latin America, multiple service platforms,
large scale, strong free cash flow, ample financial flexibility and policy of
having a sound financial and liquidity profile. The ratings incorporate the
expectation that management will maintain a relatively conservative financial
profile over the long term.

A strong competitive environment and declining prices in voice services temper
the ratings. The company's foreign currency Issuer Default Rating (IDR) is
rated above the 'A-' country ceiling of Mexico, where it is domiciled. The
difference is based on America Movil's geographical diversification with 52%
of EBITDA generated outside Mexico and approximately 85% of EBITDA coming from
investment grade countries. The ratings also reflect the company's strong
credit profile with committed credit facilities, which mitigates transfer and
convertibility risks.

America Movil's credit quality is underpinned by its Mexican wireless and
fixed units that account for approximately 36% of revenues and 48% of EBITDA
for the 12 months ended June 30, 2012. Recent rulings by Mexican authorities
have had a negative result on America Movil for both fixed and wireless
businesses. However, these negative outcomes should not be material to credit
quality on a consolidated basis. In addition, the MXN12 billion fine imposed
by the Mexican antitrust authority was revoked recently.

The company's diverse revenue stream, generated by wireless and wire line
businesses outside Mexico, provides the company with cash flow and currency
diversification. Fitch believes a geographically diversified portfolio of
assets and services lowers business risk and cash flow volatility. For the 12
months ended June 30, 2012, 79% of EBITDA was generated by Mexico, Brazil and
Colombia (including Panama). For this period, wireless revenues accounted for
approximately 66% of total revenues and the remainder by fixed services.

Manageable KPN & TKA Investments:

America Movil recently announced investments in European telecom companies.
Fitch believes this plan follows an approach to explore operations in new
geographies at reasonable prices. Total disbursements for these transactions
should amount approximately to USD4.9 billion (EUR3.95 billion). These
investments are expected to help America Movil assess whether in the long term
they should or should not continue increasing its presence in Europe. Fitch
does not expect further investments in the short term, and the ratios of total
debt to EBITDA of approximately 1.6x and net debt to EBITDA of 1.4x should be
temporal before trending towards historical levels over the medium term.

On June 27, 2012, America Movil announced the acquisition of a 27.7% stake in
Royal KPN NV (KPN) through a tender offer. The acquisition should be
manageable, given America Movil's financial profile and cash flow generation.
America Movil paid approximately EUR3 billion for a 27.7% stake and should
receive close to 4.5% in dividend yield which was recently cut off from 11% to
increase financial flexibility. The pending acquisition of approximately 23%
of Telekom Austria (TKA) has cleared some regulatory approvals. The company
owns 6.7% and should buy the remaining 16% soon. TKA paid EUR334 million in
dividends during fiscal year (FY) 2011.

Fitch's long-term expectation of leverage for America Movil incorporates that
net debt to EBITDA will be at 1.0x. For the 12 months ended June 30, 2012,
America Movil's total debt to EBITDA was 1.6x, while net debt to EBITDA
approximated 1.4x. For this period total debt amounted to MXN424 billion
(USD30 billion) of which 81% is debt issued in the capital markets and 19% is
bank debt. America Movil's currency risk exposure strategy over the past few
years is to have the net debt in Mexican Pesos after considering hedges.

The company's liquidity position is strong. As of June 30, 2012, cash balances
reached MXN62 billion and unused committed credit facilities are now USD4
billion on top of cash from operations (CFO) over the past 12 months of MXN215
billion. This favorably compares with maturities for the next three years of
MXN38.7 billion. In addition, the company's access to capital markets and
extended maturity profile adds to financial flexibility.

Free cash flow is expected to remain strong over the medium term, underpinned
by stable capital expenditures in the next few years of approximately USD9
billion-USD9.5 billion. Funds flow from operations (FFO) still has some room
to grow driven by increased mobile penetration, higher adoption and usage of
mobile data and growth in fixed operations outside Mexico. Free cash flow may
be returned to shareholders absent any acquisitions. With respect to
acquisitions, Fitch believes America Movil will follow a disciplined approach
to its capital structure and the valuation of any potential acquisition.

Key Rating Drivers:

A positive rating action seems limited at the time given the rating level and
last upgrade in June of 2011. In contrast, a negative rating action can occur
if net leverage increases between 1.5x-2.0x on a sustained basis due to
operational or strategic factors.

Fitch currently rates America Movil as follows:

--Local currency IDR affirmed at 'A';
--Foreign currency IDR affirmed at 'A';
--Senior notes issuances affirmed at 'A'.
--Mexican national scale rating affirmed at 'AAA(mex)';
--Certificados Burstiles issuances with ticker symbols AMX 10, AMX 10-2 and
AMX 10U affirmed at 'AAA(mex)';
--30 Million UF-denominated Chilean Notes Program, including Series A and D
issuances for a combined amount of UF9 million, affirmed at 'AA+(cl)'.

Additional information is available www.fitchratings.com. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Rating Global Telecoms Companies', Sept. 16, 2010;
--'Corporate Rating Methodology', dated Aug. 12, 2011;
--'National Ratings Criteria', Jan. 19, 2011;
--'Rating Corporates Above the Country Ceiling', Jan. 30, 2012;
--'Parent and Subsidiary Rating Linkage (Fitch's Approach to Rating Entities
Within a Corporate Group Structure)', Aug. 12, 2011.

Applicable Criteria and Related Research:
Rating Global Telecoms Companies - Sector Credit Factors
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=550205
Corporate Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229
National Ratings Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=595885
Rating Corporates Above the Rating Ceiling
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=668909
Parent and Subsidiary Rating Linkage
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647210

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Contact:

Fitch Ratings
Primary Analyst:
Sergio Rodriguez, CFA, +52-81-8399-9100
Senior Director
Fitch Mexico S.A. de C.V.
Prol. Alfonso Reyes 2612
Monterrey, Mexico
or
Secondary Analyst:
John Culver, CFA, +1-312-368-3216
Senior Director
or
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Alberto Moreno, +52-81-8399-9100
Senior Director
or
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