We expect Telefónica will further strengthen its recent operating improvement, reflecting progressive stabilization in Spain and sound organic dynamics in Latin American markets. We think the close of the group's disposal of its U.K. business O2, if successful, and management's commitment to leverage disposal proceeds to revert to its stated financial policy guidelines will likely contribute to a marked improvement in the group's financial profile and key metrics. We are therefore revising our outlook on Telefónica and related subsidiaries Telefónica Moviles Chile S.A. and Telefónica Chile S.A. to positive from stable and affirming our 'BBB' long-term ratings on these companies. The positive outlook mainly reflects the potential of a one-notch upgrade of Telefónica within the next two years, if the
