Fitch downgrades Grupo Idesa

Fitch Ratings said it downgraded Grupo Idesa, SA de CV’s long-term local and foreign currency issuer default ratings to C from CCC-. Fitch also downgraded Grupo IDESA’s senior unsecured notes to C/RR4 from CCC-/RR4.

“The downgrades follow Grupo IDESA’s announced launch of a tender offer to exchange its unsecured notes due in 2020 for new secured notes due in 2026, which Fitch considers a distressed debt exchange (DDE) as per its DDE criteria,” Fitch said in a press release.

“In Fitch’s opinion, the offering imposes to bondholders of existing notes a limited alternative to decline the proposed transaction given the company’s financial distress and turbulent credit market conditions. The present transaction could be considered to be conducted to avoid a traditional payment default. Also, the offering imposes to bondholders of existing notes, a material reduction in terms of the existing 2020 notes, as the exchange will eliminate restrictive covenants and certain events of default included in the existing senior notes indenture for the bonds that are not tendered,” Fitch said.

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