Fitch lowers General Shopping

Fitch Ratings said it downgraded the ratings of General Shopping Brasil SA’s foreign currency and local currency issuer default ratings to CCC from BB- and national scale rating to CCC(bra) from A-(bra).

The agency also lowered General Shopping Finance Ltd.’s $250 million perpetual notes to B- from BB- and General Shopping Investment Ltd.’s $150 million subordinated perpetual notes to CCC- from B.

Fitch assigned RR2 and RR5 recovery ratings to the $250 million notes and $150 million notes, respectively.

The ratings were placed on Rating Watch Negative.

Fitch said the downgrades reflect General Shopping’s deterioration in its financial leverage and capacity to service interest expense.

The negative watch reflects the expectation that the company’s credit profile deterioration will continue during the second half of 2015, putting pressure on its liquidity. It also incorporates the view that General Shopping entering into a debt restructuring process is likely to occur in the near future.

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