Fitch Solutions: America Movil & Telmex CDS At Widest Level in Nearly Two Years

NEW YORK--()--Weaker Latin American currencies and regulatory issues are leading to widening credit default swap (CDS) spreads for two telecom giants in Mexico, according to Fitch Solutions in its latest CDS Case Study Snapshot.

Five-year CDS on America Movil and Telefonos de Mexico (Telmex) widened 28% and 29% last week, respectively. Additionally, CDS referencing both companies' debt are pricing at the widest levels observed since August 2013 with the parent company (America Movil) CDS testing below investment grade spread levels.

'CDS widening for America Movil and Telmex likely reflects market concerns stemming from weaker Latin American currencies as well as expected penalties resulting from the anti-monopoly regulations enacted by Mexico last year,' said Director Diana Allmendinger.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.

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Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content. Fitch Ratings and Fitch Solutions are part of the Fitch Group, a jointly-owned subsidiary of Fimalac, S.A. and Hearst Corporation. For additional information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com'; 'www.fimalac.com' and 'www.hearst.com'.

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Contacts

Fitch Solutions
Diana Allmendinger
Director
+1 212-908-0848
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Solutions
Diana Allmendinger
Director
+1 212-908-0848
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com