Telefonica de Espana SA’s big adventure in Peru has not gone down well with Moody’s Investors Service Inc, which says it may downgrade the Prime-1 short term debt ratings of Telefonica and its wholly-owned Telefonica North America Inc, affecting some $375m of short-term debt. The review was prompted by the news that the consortium headed by Telefonica’s 76.22%-owned Telefonica Internacional de Espana SA won the bidding for a 35% stake in one and a 20% stake in another Peruvian phone company. Moody’s will assess the extent to which these investments, which will total $2,000m, might erode Telefonica’s financial profile and increase risks.
