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Published on 12/21/2017 in the Prospect News Emerging Markets Daily.

S&P lowers Grupo Idesa

S&P said it lowered the corporate credit rating on Grupo Idesa SA de CV to B from B+ and lowered the issue-level rating to B from B+ on the company's $300 million senior unsecured notes due 2020.

The 4 recovery rating on the company's debt remains, indicating an expectation of average (30%-50%) recovery in the event of a payment default.

The outlook is stable.

The agency said the downgrade reflects Idesa's persistently high leverage metrics, driven by weak petrochemical spreads.

It also takes into account lower volume levels as a result of feedstock shortages of ethylene oxide, the company's less than adequate liquidity and their strategic decision not to tap the market with an initial public offering and use proceeds to reduce debt, S&P explained.


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