S&P gives Lojas Americanas, notes BB

S&P said it assigned BB ratings to Lojas Americanas SA and its planned benchmark-sized offering of senior unsecured notes. Subsidiary JSM Global Sarl will sell the notes, which will be guaranteed by Lojas Americanas. The agency also assigned a 4 recovery rating to the proposed notes, which indicates an average recovery between 30%-50% (rounded estimate 45%) in the event of default.

S&P said it expects the company to use proceeds from recent capital increases to retire debt in about R$6.8 billion, resulting in debt to EBITDA close to 1x and FFO to debt of about 50% in the next two years, compared with 3.6x and 17% in 2019.

S&P also assigned a brAAA national scale rating to the company.

The outlook is stable. The outlook reflects S&P’s forecast the company will deliver credit metrics in line with its base-case assumptions over the next 12-18 months, the agency said.

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