Moody's lowers Gravetal

Moody's Latin America said it downgraded Gravetal Bolivia SA's national scale rating to A1.bo from Aa3.bo and its global scale senior unsecured debt rating to Caa1 from B3 for its $45 million bonds.

The outlook is stable.

The downgrade reflects Moody's expectation that the issuer's credit metrics are unlikely to improve in the near term, the agency said. The ratings also reflect increased draw downs on uncommitted credit lines due to increased working capital needs and a more uncertain political and economic environment in Bolivia, Moody's said.

The Caa1 rating is constrained by the company's significant leverage, with a debt-to-EBITDA ratio of more than 8 times, its fragile liquidity and highly volatile commodity business, and its small scale and limited geographic diversification, the agency said.

The ratings also reflect the issuer's position as a main exporter in Bolivia and the tariff protection mechanism in place, Moody's said. The stable outlook reflects the expectation that credit metrics and profits will stay near historical levels and that Gravetal will keep its access to the local short-term financing from banks to fund working capital and debt maturities.

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