Fitch puts Mexico's TV Azteca on 'negative watch' amid legal row
By Julia Love
MEXICO CITY, Aug 16 (Reuters) - Credit ratings agency Fitch on Thursday placed TV Azteca on "negative watch," warning of the risks of the Mexican broadcaster's legal dispute with American Tower Corp as the companies attempt to reach a settlement.
MATC Infraestructura, a unit of cell tower owner and operator American Tower, sued TV Azteca for nearly $97 million in a New York state court, saying the company had defaulted on a loan.
American Tower and TV Azteca are now engaged in talks to settle the lawsuit, the companies wrote in court papers filed on Wednesday. In court papers, the broadcaster did not confirm or deny having defaulted on the loan from American Tower.
"The Negative Watch reflects the high level of uncertainty related to the difficult situation of TV Azteca's vendor financing and leasing agreement with the Mexican subsidiary of American Tower Corp (ATC)," Fitch wrote.
Spokesmen for TV Azteca and American Tower did not immediately respond to requests for comment.
Fitch has given TV Azteca a credit rating of "B+," under the "speculative" category.
If TV Azteca defaults on its loan from American Tower, that could lead to default on other loans under "cross-default" clauses, Fitch wrote.
The dispute with American Tower also highlights TV Azteca's "aggressive negotiating tactics," Fitch wrote.
Nevertheless, TV Azteca has made progress in its core business of content and broadcasting, the ratings agency said.
"Fitch believes TV Azteca has a solid financial liquidity position, enough to comfortably cover all its interest payments," it added. (Reporting by Julia Love Editing by Susan Thomas)
