HG bonds: Telefonica Moviles Chile targets 2022 maturity with new deal; terms

Telefonica Moviles Chile SA today completed a $500 million offering of 3.537% 10-year notes due Nov. 18, 2031, at T+200.

The Santiago, Chile-based issuer provides mobile telecommunications services in the country.

Proceeds will be used to repay the company's 3.875% notes due October 2022, and for general corporate purposes, according to S&P Global Ratings and Fitch, which earlier this week assigned respective BBB-/BBB+ ratings to the new bond placement. The outlooks are stable.

Ratings noted that since leverage will remain unchanged and the new issuance will only extend the maturity profile, the company's credit profile will not change. "Our 'BBB-' issuer credit rating reflects TMC's strong brand recognition, good competitive position in the Chilean market, and strong free cash flows. The rating also reflects that significant competition in Chile could pressure TMC's results, causing its leverage to peak at 1.6x-2.4x and EBITDA margin to drop below 30% in the next two years," the agency said Nov. 8.

Fitch affirmed its BBB+ rating in September. "The group's ratings reflect its conservative financial profile and market position in both mobile and fixed-line segments. Negatively, the competitive environment in Chile continues to pressure profitability and cash flow, and Fitch does not expect a material improvement in margins or revenues in the medium term," analysts said on Nov. 8.

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