S&P affirms Grupo KUO

Standard & Poor's said it affirmed Grupo KUO SAB de CV's BB- long-term corporate credit rating, mxBBB+ national scale corporate credit rating and BB- foreign-currency rating on its $250 million senior unsecured notes maturing in 2017.

The affirmations follow a proposed additional amount of $50 million and $175 million unsecured bank loan maturing in 2013. The recovery rating on the notes is 3, indicating an expectation of 70% to 90% recovery in the event of a default.

The proceeds will be used to prepay a portion of its $175 million unsecured bank loan maturing in 2013.

The outlook is stable.

The ratings are limited by the low and volatile profitability inherent to some of the core businesses in which the company operates and what the agency said it see as relatively high financial leverage indicators.

The company's focus on maintaining only profitable and value-added operations within its business portfolio, comfortable debt maturity schedule and continued implementation of cost-reduction and efficiency programs support the ratings, S&P said.

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