Fitch cuts Sanluis

Fitch Ratings said it downgraded Sanluis Corp., SA de CV's foreign- and local-currency issuer default ratings to C from CC, debenture notes due June 2010 to C with a recovery rating of RR6 from CC with a recovery rating of RR6 and mandatory convertible notes due June 2011 to C with recovery rating of RR6 from CC with recovery rating of RR6. The agency also said it downgraded Sanluis Rassini Autopartes, SA de CV's foreign- and local-currency issuer default ratings to C from CC.

These downgrades are due to the high level of refinancing risk faced by the company during June 2010 due to the maturity of $125 million on secured bank debt and the $86 million debentures, Fitch said.

The ratings reflect an expectation that the recovery prospects for the debt instruments are poor in the event of a default, the agency said. These unsecured notes were issued by an intermediate holding company, Sanluis Co-Inter, SA and are therefore structurally subordinate to the secured debt at the level of the operating companies, the agency said.

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