S&P affirms Alestra

Standard & Poor's said it affirmed Alestra S de RL de CV's B+ global scale corporate credit rating, the B+ senior unsecured rating and the recovery rating of 3, indicating 50% to 70% expected recovery in a default.

The outlook is stable.

The ratings reflect the risks of competing with larger and better capitalized telecommunication companies -primarily incumbent Teléfonos de México SAB de CV - in an industry subject to growing price pressure and a decline in revenues from traditional long-distance services.

The ratings also consider Alestra's exposure to foreign-exchange risk derived from its debt being 100% denominated in U.S. dollars, S&P said, and the risk of the expiration at maturity of its agreement to operate AT&T's global services.

The company should be able to offset the decline in long-distance revenues somewhat by capturing growth in the value-added services segment in Mexico, the agency said.

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