Grupo Televisa S.A.B.#s MXN4.5 Billion Global Depository Notes Rated #BBB+#

Stocks and Financial Services Press Releases Wednesday March 28, 2018 10:15
MEXICO CITY--28 Mar--S&P Global Ratings

MEXICO CITY (S&P Global Ratings) March 27, 2018--S&P Global Ratings assigned its 'BBB+' senior unsecured local currency rating to Grupo Televisa S.A.B's Global Depository Notes (Televisa; BBB+/Stable; CaVal: mxAAA/Stable).

The GDNs, in the amount of Mexican pesos $4.5 billion, represent underlying local-currency securities already issued, Certificados Bursátiles (cebures; ticker: TLEVISA 17), with an interest rate of 8.79% and a maturity in 2027; the depositary is Citibank N.A. The 'BBB+' rating on the GDNs addresses the payment risk associated with Televisa's payment obligations on the underlying cebures. The GDNs will be offered in the secondary market.

A key feature of the GDNs is that the depositary will convert the payments that it receives from Televisa in Mexican pesos, less the depositary's fees and expenses, into U.S. dollars at the exchange rate in effect at the time of payment, unless there are restrictions on convertibility at that time. The rating on the GDNs, however, relates only to the obligations of Televisa under the Cebures, and not to the additional services the depositary is to perform with respect to the GDNs.

The disclosure statement on the GDN supplement to the offering memorandum indicates that Televisa's payment obligations under the Cebures will rank equally with all of the company's other present and future unsecured and unsubordinated debt.

The ratings on Televisa reflect our expectation that it will maintain its leading position in the Mexico's TV industry and our expectation that the company will deliver satisfactory revenue growth and strong EBITDA contributions from its cable and SKY segment. The ratings also reflect our expectation that net debt to EBITDA will remain at around 2.0x and funds from operations to debt will be above 30% for the next two years. We now expect positive free operating cash flow for the next few years, as the company has already finished its expansion capital expenditure program.

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