Fitch rates Coltel notes BB

Fitch Ratings said it expects to assign a BB rating to Colombia Telecomunicaciones SA ESP's (Coltel) proposed up to $750 million senior notes due 2022.

The proceeds will be used to refinance existing indebtedness, improving the debt maturity profile, Fitch said.

Fitch also assigned to the company local- and foreign-currency issuer default ratings of BB.

The outlook is stable.

The ratings incorporate the merger between fixed unit Coltel and Telefonica Moviles Colombia SA, the agency said.

The ratings also reflect its solid competitive position and operating profile, ability to generate cash flows and moderate financial leverage, Fitch said.

The ratings are tempered by higher capital expenditures expected over the next few years, which will limit free cash flow, the agency said.

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