S&P cuts Grupo KUO

S&P said it lowered the ratings for Grupo KUO SAB de CV and its senior notes to BB- from BB, but affirmed the notes’ 3 recovery rating. The agency also lowered the Mexican scale ratings to MxBBB+ from MxA and removed the ratings from CreditWatch with negative implications.

“We based the downgrade of KUO on our expectation that the company’s credit metrics will remain high for the rating level, after KUO announced last Monday that there had been a fire at its pork meat processing plant, which will severely hamper production. This is a major setback because the plant represents about 30% of the total processed meat that KUO sells, a business line that accounted for 47% of the conglomerate’s total revenues in 2019,” S&P said in a press release.

S&P assigned a negative outlook, citing uncertainty about how long meat processing plant will be closed.

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