Fitch: TELPRI Ratings Unaffected by America Movil Acquisition

CHICAGO--()--April 3, 2006--The proposed acquisition of Telecomunicaciones de Puerto Rico, Inc. (TELPRI) by America Movil, S.A. de C.V. (America Movil) has a neutral effect on TELPRI, according to Fitch Ratings, who rates TELPRI as follows:

-- Issuer Default Rating (IDR) 'BBB+';

-- Senior unsecured credit facilities 'BBB+';

-- Senior unsecured notes 'BBB+';

-- Commercial paper 'F2';

-- Rating Outlook Stable.

On April 3, 2006, America Movil announced a definitive agreement to acquire Verizon Communications, Inc.'s (Verizon) 52% interest in TELPRI for $939 million. America Movil has also agreed with Verizon to extend an offer to TELPRI's remaining shareholders to purchase their shares at the same price per share to be paid to Verizon. The transaction is part of two other transactions whereby Verizon is selling its 100%-owned Verizon Dominicana property to America Movil, and its 28.51% stake in Compania Anonima Nacional Telefonos de Venezuela (CANTV) to a joint venture equally owned by America Movil and Telefonos de Mexico, S.A. de C.V. (Telmex). Regulatory approval will be needed in each jurisdiction. The transactions are expected to close by the end of 2006, with the potential that approval for the TELPRI transaction could extend into the first quarter of 2007. Each transaction has been structured as a separate transaction and is not contingent on the close of the others.

The acquisition by America Movil is expected to have a neutral effect on TELPRI's ratings since America Movil is similarly rated (foreign and local currency both rated 'BBB+' with a Stable and Positive Rating Outlook, respectively). America Movil is expected to fund the transaction with cash and internally generated funds. The company had approximately $1.2 billion in cash at year-end 2005. For more information on America Movil, see Fitch's separate commentary on the transaction from earlier today, 'Fitch: America Movil & Telmex's Ratings Unaffected by Verizon Announcement', which is available on the Fitch Ratings web site at www.fitchratings.com.

TELPRI's rating is based on solid credit-protection measures for the assigned rating, expected continued debt reduction in 2006 and 2007 and the company's strong competitive position in the wireline and wireless market in Puerto Rico. These positive factors are balanced against a competitive picture that encapsulates heavier competition in the wireless and long-distance segments, moderate competition in the local exchange business and a weak economy. For 2005, debt/EBITDA was 1.79 times (x), similar to the 1.81x produced in 2004. Fitch's existing ratings of TELPRI have not assumed any potential financial support from Verizon.

Fitch believes TELPRI is well-positioned to provide a diverse bundle of telecommunications services in the increasingly competitive market in Puerto Rico, as it is the only carrier that can offer a complete bundle of voice, data and wireless services to both residential and business customers. The company, through its subsidiary, Puerto Rico Telephone Company (PRTC), provides service to approximately 1.11 million access lines and 485,000 wireless customers at Dec. 31, 2005. TELPRI is the largest Internet service provider in Puerto Rico and, through its digital subscriber line (DSL) business, holds a significant share of the island's consumer high-speed data market.

The debt securities issued by TELPRI are guaranteed on a full and unconditional basis by PRTC, which is the primary operating subsidiary and whose cash flows are derived from the wireline and wireless businesses. At Dec. 31, 2005, TELPRI had approximately $752 million in total debt outstanding, comprised of $700 million of senior notes and $52 million of commercial paper. In May 2006, $400 million of debt matures and, while Fitch expects a portion of the maturing to be refinanced, debt is expected to be down for the year 2006.

Fitch believes TELPRI's liquidity position is strong. TELPRI has a $275 million revolving credit facility that matures on Feb. 28, 2009 and a $275 million term credit facility that is available for one draw at any time until May 1, 2006. The term facility matures on February 28, 2011. Both facilities can be increased to $300 million, with the increase in the revolver permitted at any time prior to maturity, and the increase in the term facility allowed at any time prior to May 1, 2006. America Movil's intentions with respect to the continuation of these facilities following the close of the transaction is not known at this time.

TELPRI is a full service telecommunications services provider in Puerto Rico. Through its Puerto Rico Telephone Company, PRT Larga Distancia, Inc. and Coqui.net Corp. subsidiaries, the company provides local, long distance, data and wireless services to its business and residential customers. TELPRI was privatized in 1999 and is now 52% owned by Verizon Communications. TELPRI's wireless operations have been operating under the Verizon Wireless name since November 2001.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Contacts

Fitch Ratings
John Culver, CFA, 312-368-3216 (Chicago)
Bill Densmore, 312-368-3125 (Chicago)
Christopher Kimble, 212-908-0226
(Media Relations, New York)

Contacts

Fitch Ratings
John Culver, CFA, 312-368-3216 (Chicago)
Bill Densmore, 312-368-3125 (Chicago)
Christopher Kimble, 212-908-0226
(Media Relations, New York)