Fitch Rates America Movil's US$1B Two-tranche Issuance 'A-'; Outlook Stable

Business Wire, Oct 25, 2007

MONTERREY, Mexico & CHICAGO -- Fitch Ratings has assigned an 'A-' rating to America Movil, S.A.B de C.V.'s (America Movil) US$1 billion two-tranche senior notes issuance consisting of:

--US$600 million 5.625% senior notes due 2017

--US$400 million 6.125% senior notes due 2037.

Proceeds from the debt issuance will be used for general corporate uses.

Fitch rates America Movil as follows:

--Local currency Issuer Default Rating (IDR) 'A-';

--Foreign currency IDR 'A-';

--Outstanding indebtedness including approximately US$4.5 billion 'A-';

--Chilean notes program of approximately US$1.0 billion 'AA (chl)'.

The Rating Outlook is Stable.

America Movil's ratings are supported by the company's strong market position in the Mexican mobile segment, its diverse and growing portfolio of wireless assets throughout Latin America and its sound financial and liquidity position. The ratings also reflect strong growth in subscribers, revenues and cash flow that have resulted in stronger credit protection measures and the expectation that management will maintain a relatively conservative credit profile over the long term. Given the company's conservative leverage, Fitch believes America Movil has some flexibility to use its excess cash flows for additional share repurchases and to increasing dividend payments, such as the recently proposed extraordinary dividend of approximately US$3.2 billion.

America Movil's credit ratings are underpinned by Telcel, its Mexican wireless unit. Telcel business fundamentals are supported by strong demand growth and growing EBITDA margins that should continue to remain above the 50% level, resulting in strong cash flow generation. Telcel accounted for approximately 41% of consolidated revenues and 53% of EBITDA for the first nine months of 2007 and is the largest wireless provider in Mexico, with an estimated market share of 74%. Demand for wireless services in Mexico is still growing at a fast but slower pace; Telcel grew its customer base by 16.7% to 47.5 million wireless users over the last twelve months ended Sept. 30, 2007.

The company has an increasingly diverse revenue stream, generated by a growing wireless business outside Mexico that provides the company with important cash flow and currency diversification. Fitch expects that over the next few years, operations outside Mexico should continue contribute more to consolidated EBITDA. For the first nine months of 2007, the company's non-Mexican subsidiaries accounted for 59% of consolidated revenues and 47% of EBITDA and are expected to generate sufficient cash flow to meet America Movil's consolidated interest expense in excess of 6.0x; a geographically diversified portfolio of assets lowers business risk and cash flow volatility. As of Sept. 30, 2007, America Movil operated in 14 Latin American countries in addition to Mexico and the United States, and is well-positioned to benefit from the wireless growth opportunities present in Latin America. The company's subscriber growth rate outside Mexico continues to be strong, but is slowing down, at 31% over the last 12 months ended Sept. 30, 2007. As a result of slower growth and increase usage, EBITDA margins for most operations improved as subscriber acquisition costs decline and as service revenue increase.

The company's liquidity position is strong, with cash balances as of Sept. 30, 2007 of approximately US$2.5 billion, upcoming maturities for the next three years of about US$2.4 billion. In addition America Movil's liquidity profile benefits from ample access to financial markets and strong cash flow generation. The company is expected to maintain a strong financial position as cash flow generation is underpinned by a healthy and growing EBITDA, which should approximate to US$11 billion for year-end 2007.

America Movil is expected to increase its free cash flow over the next few years as EBITDA continues to grow and capital expenditures stabilize. Fitch expects excess free cash flow will be used to return funds to shareholders via dividends and stock buybacks and to build cash balances, absent acquisitions. For the last 12 months ended Sept. 30, 2007, total debt to EBITDA was 0.8x, net debt to EBITDA was 0.6x and EBITDA to gross interest expense remained at 16.1x, consistent within the rating category. The ratings incorporate increasing dividend payments and additional share buybacks. The later will depend on the amount of excess of cash available after potential acquisitions are considered.

America Movil is the largest provider of wireless services in Mexico and Latin America. In total, the company is composed of subsidiaries outside Mexico in 15 countries in the Americas with 143 million wireless subscribers. The company's investments outside Mexico are located in Brazil, Colombia, Ecuador, Argentina, Guatemala, Nicaragua, Honduras, El Salvador, Uruguay, the United States, Paraguay, Chile, Peru, Puerto Rico and Dominican Republic.

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