Moody's lowers Lecta view to negative

Moody's Investors Service said it changed the outlook on Lecta SA to negative from stable.

The agency also said it affirmed its B2 corporate family rating, B2-PD probability of default rating, as well as B2 ratings on its senior secured bonds.

The ratings reflect a view that Lecta's performance through 2018 has been lower than expectations, especially its cash flow generation, Moody's explained.

While the agency said it expects Lecta will be able to partially reverse the cash burn in the seasonally strongest fourth quarter, there is uncertainty as to whether the company will manage to structurally release working capital and regain a stronger liquidity buffer, the agency said.

During 2018, Lecta managed to partially compensate for unprecedented cost inflation,

The ratings also consider the company's sizable exposure to various supply chain financing arrangements, Moody's said.

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