Moody's assigns B2/A1.ar ratings to Garbarino

Moody's Latin America said it assigned a first-time B2 local currency corporate family rating and an A1.ar Argentina national scale rating to Garbarino SA.

At the same time, Moody's assigned a B2 local currency rating and an A1.ar Argentina national scale rating to Garbarino's new ARS 15 million credit facility from Banco de la Nacion Argentina (not rated). The outlook is stable.

"The B2 and A1.ar ratings are underpinned by Garbarino's position as one of the largest dedicated consumer electronics and appliance retailers in Argentina and the diversification of its product line, which has allowed Garbarino to increase its share of the consumer's wallet," said Moody's AVP analyst Veronica Amendola in a news release.

"The ratings also reflect Garbarino's solid position in selling recognized brand names and its well-established relationships with suppliers."

Credit negatives offsetting these strengths include Garbarino's relatively high lease-adjusted leverage of 4.3 times, since nearly all of its retail stores are leased rather than owned, and the challenging competitive environment, where many new entrants have appeared over the past years, in addition to traditional competitors, the agency said.

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