S&P gives Credito Real notes BB-

Standard & Poor's said it assigned its BB- rating to the up to $180 million of five-year senior unsecured notes proposed by Credito Real SA de CV Sofom ENR.

The outlooks are stable.

"The ratings on Credito Real reflect its high dependence on volatile funding sources, primarily market debt, somewhat increasing its refinancing risk," said S&P credit analyst Alfonso J. Novelo.

"Also, the agency said it considers the strong competition in payroll discount lending in Mexico."

Somewhat offsetting these risks are the company's adequate asset quality, improved and more stable profitability, and improvements in adjusted capitalization, the agency noted, adding that the rating on the notes also takes into consideration a full foreign-exchange hedge, of principal and interest, during the whole term of the notes.

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