S&P affirms Grupo Famsa

Standard & Poor's said it affirmed the B corporate credit rating on Grupo Famsa SAB de CV, along with the B senior unsecured debt rating on its $200 million fixed-rate notes.

The agency also said it affirmed the recovery rating on the notes at 3, indicating 50% to 70% expected recovery in a default.

The outlook is stable.

The ratings are limited by the company's weak business profile based on its small position in Mexico as its main market, S&P said.

The agency also said it considered the risks posed by the high competition in the industry, the company's dependence on bank deposits to fund its growth and its highly leveraged financial risk profile.

The ratings also incorporate the company's opportunities to gain market position in the Mexican retail industry as a result of a large informal market with no access to credit, the company's operating efficiencies and its increase in geographic and client diversification within the country, S&P said.

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