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Fitch Ratings reported it has placed Carso Global Telecom S.A.B. de C.V. (CGT) and Telmex Internacional's (Telint) 'AA(mex)' National Scale Ratings on Rating Watch Positive following an announcement yesterday by America Movil, S.A.B. de C.V. (America Movil; 'A-').

According to Fitch, America Movil proposes to tender for CGT and, if successful, for Telint shares not owned by CGT. Fitch expects that America Movil and Telefonos de Mexico S.A.B. de C.V.'s (Telmex; 'A-') Issuer Default Ratings (IDRs) will not change as a result of this transaction. Fitch said it also views this transaction as a positive for America Movil's credit quality in the long term despite the potential increase in leverage in the short term.

The rating action follows the announcement made by America Movil to tender for CGT share in exchange for America Movil shares, without having any cash implication to America Movil. CGT controls 59.4 percent of Telmex and 60.7 percent of Telint. Once this process is completed America Movil will offer the remaining shareholders of Telint, at the Telint shareholders' option, to either exchange shares of Telint by shares of America Movil or to receive a cash payment of 11.66 MXN per Telint share. The transaction is subject shareholder and regulatory approvals. Assuming the tender is accepted by all CGT and Telint shareholders, Fitch expects America Movil's consolidated pro forma total debt to EBITDA ratio to range between 1.1 times (x) to 1.5x and net debt to EBITDA to range between 0.9x and 1.3x, depending on how many Telint shares are tendered for cash and assuming this cash payment is funded with additional debt. Fitch expects America Movil's long-term target of net debt to EBITDA to remain approximately 1.0x.

Telint's ratings are currently strongly influenced by the company's cash flow concentration in Brazil. However, ratings for both CGT and Telint should benefit from CGT's coming under the umbrella of America Movil, which is a geographically diverse multinational company with substantially stronger access to financial resources and operating efficiencies. The Watch Positive on CGT and Telint is expected to be resolved once the transaction is finished.

Fitch places the following ratings on Rating Watch Positive:

CGT

--National Scale Long Rating 'AA(mex)';

--National Scale Short Rating 'F1(mex)';

--MXN7 billion Dual Certificados Brusatiles Program 'AA(mex)';

--Certificados Brusatiles Issuance Telecom04-2 'AA(mex)'.

TELINT

--National Scale Long Rating 'AA+(mex)';

--National Scale Short Rating 'F1+(mex)';

--MXN20 billion Dual Certificados Brusatiles Program 'AA(mex)' and 'F1+(mex)';

--Certificados Brusatiles Issuances Telint09 and Telint09-2 of MXN5 billion 'AA(mex)'.

Fitch currently rates AMX and TMX as follows:

AMX

--Local currency IDR 'A-';

--Foreign currency IDR 'A-';

--Mexican national scale rating 'AAA(mex)';

--Senior unsecured debt of approximately US$4.4 billion in senior notes 'A-';

--Approximately US$1 billion of UF denominated Chilean Notes Program, including approximately US$157 million outstanding 'AA+(cl)'.

TMX

--Local currency IDR 'A-';

--Foreign currency IDR 'A-';

--Senior unsecured debt of approximately US$2.6 billion in senior notes 'A-'.