Fitch rates Automotores Gildemeister add-on BB

Fitch Ratings said it assigned an expected BB rating to Automotores Gildemeister SA's reopening of its 8¼% senior notes due 2021. The reopening is expected to be $100 million or less and carries the same rating as the original $300 million issue.

The agency maintains BB foreign- and local-currency issuer default ratings on the company. The outlook is stable.

Proceeds from the proposed reopening are expected to be used to refinance existing short-term debt.

Fitch said the company's ratings reflect its solid business position in the automobile distribution and retailing industry within Chile and Peru; its unique business model, which has resulted in EBITDAR margins of about 14% during the last 12 months ended in September; its strong performance during 2009, a period of high stress in the market; and the favorable outlook for vehicle demand in Chile and Peru.

The ratings are constrained by the cyclicality of the company's business, moderate leverage, negative free cash flow and limited product diversification, the agency said.

The company's ratio of total adjusted debt to total EBITDAR was 2.8 times for the last 12 months ended in September.

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