...Rating Derivation vs. Peers Peer Comparison Telefonica SA is rated broadly in line with other geographically diversified European telecom operators such as Orange S.A. (BBB+/Stable), Deutsche Telekom AG (BBB+/Stable) and Vodafone Group Plc (BBB+/Stable). A greater exposure to emerging markets with sub-investment grade ratings results in a slightly lower leverage per rating band than its peers. Telefonica SA and the peer group combine strong operational positions in both fixed and/or mobile with sizeable and diverse cash-flow operations. Operators with a single market focus, such as Royal KPN N.V. (BBB/Stable) and BT Group plc (BBB+/Stable), have tighter leverage thresholds for their respective ratings. Parent/Subsidiary Linkage No parent/subsidiary linkage is applicable. Country Ceiling No Country Ceiling constraint was in effect for these ratings. Operating Environment No operating environment influence was in effect for these ratings. Other Factors Not applicable....
