Moody’s puts credit ratings for cell phone company NII Holdings on review for possible upgrade

Tuesday, May 25, 2010

Moody’s puts NII rating on review for upgrade

NEW YORK — Moody’s Investors Service said Tuesday it has placed its ‘B1′ credit ratings on international cell phone company NII Holdings Inc. under review for possible upgrade, citing the cash infusion NII would receive from Grupo Televisa SA if it wins a joint spectrum bid in a Mexican auction of wireless airwaves.

The ratings cover about $1.3 billion of NII debt. ‘B1′ is a junk rating four notches below investment grade.

In February, Televisa said it will buy 30 percent of NII unit Comunicaciones Nextel de Mexico SA de CV for $1.44 billion. But the deal is contingent on Nextel and Televisa winning the Mexican wireless spectrum auction.

Grupo Televisa, the world’s biggest producer of Spanish-language TV programs, also has the option to buy another 7.5 percent stake. Televisa offers Internet, TV and telephone landline services through three cable companies and wants to offer cell phone service too.

Moody’s said NII’s ability to repay debt stands to improve given the possible Televisa investment as well as NII’s own strong operating performance. The agency also said NII’s competitive position would strengthen if it was able to acquire “meaningful” spectrum licenses in the Mexican and Brazilian auctions. These two countries are NII’s largest markets. NII, based in Reston, Va., also operates in Argentina, Peru and Chile.

Shares of NII fell $1.47, or 4.1 percent, to $34.05 in afternoon trading amid a wider market plunge.

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