S&P revises ratings on Mexican companies

S&P said it revised the global scale outlook on three Mexican companies to negative from stable and affirmed the global and national scale ratings on America Movil, SAB de CV, Coca-Cola Femsa, SAB de CV and El Puerto de Liverpool, SAB de CV.

The agency also affirmed the ratings and maintained the stable outlook on Fomento Economico Mexicano, SAB de CV (Femsa), Grupo Mexico, SAB de CV and Grupo Televisa, SAB.

The agency also said it affirmed the ratings on Kimberly-Clark de Mexico SAB de CV, and kept the negative outlook on its global scale rating and the stable outlook on its national scale rating.

The ratings revisions reflect the recent downgrade to negative on the outlook of Mexico.

The outlook revision on America Movil and Coca-Cola Femsa reflects the agency's belief that it can only rate these entities one notch higher than the foreign-currency sovereign rating on Mexico to properly capture the exposure these companies have to lower-rated countries, S&P explained.

S&P said it believes telecommunication and beverage companies are moderately sensitive to country risk.

The outlook revision on El Puerto Liverpool reflects a belief that the company wouldn't overcome a hypothetical stress test scenario in Mexico, the agency said, because its business dynamics are very sensitive to economic downturns.

The affirmations on Grupo Mexico and Femsa reflect a view that the companies will be able to generate strong cash flows even during an economic downturn because of their solid financial performance, supported by their resilient operations, manageable debt levels and ample liquidity, the agency said.

S&P said it believes Kimberly-Clark is moderately sensitive to country risk because its products are somewhat resilient to economic downturns and its current structure provides a high degree of flexibility to adjust capital expenditures and dividend payments, if needed.

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