S&P keeps Grupo Mexico on watch

Standard & Poor's said the BBB- long-term corporate credit rating on Grupo Mexico SA de CV and mining subsidiaries AMC, Southern Copper Corp. and Minera Mexico SA de CV remain on CreditWatch with negative implications, where they were placed April 7.

AMC filed a plan of reorganization on May 15 for the Asarco debtors in proceedings under Chapter 11 of the U.S. Bankruptcy Code.

"We believe that funding this plan could require AMC to issue additional debt. The CreditWatch now incorporates our view of the risk that additional debt, if any, may be issued by Gmexico's subsidiary, AMC, which could effectively structurally subordinate SCC's debt and potentially result in a change in SCC's dividend policy," S&P analyst Juan Pablo Becerra said in a statement.

The watch continues to reflect the possible negative effect on the companies' financial profile - including a potential significant near-term effect on liquidity - of the final judgment in the case of Asarco LLC and Southern Peru Holdings LLC v. Americas Mining Corp, the agency said.

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