S&P lowers Grupo Famsa

S&P said it lowered its global scale issuer credit rating on Grupo Famsa, SAB de CV to B- from B.

At the same time, the agency lowered the national scale issuer credit rating to mxB from mxBBB-.

S&P also lowered the issue-level rating on the company’s debt to B- from B. The 3 recovery rating on the company's rated debt, which indicates an expectation of meaningful (50%-90%; rounded estimate 65%) recovery prospects for the bondholders in the event of a payment default, remains.

The outlook remains negative.

“The downgrade reflects the company's liquidity constraints because initiatives to strengthen its operating and financial performance haven't been sufficient to improve cash flow generation,” the agency said in a news release.

“Despite GFamsa' short-term debt reduction by around 20% in the past six months, liquidity pressures still stem from working capital needs and other short-term obligations that could further rise if GFamsa doesn't extend its debt maturity profile to mitigate potential refinancing risks.”

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