S&P drops Vitro

Standard & Poor's said it lowered its long-term local and foreign currency corporate credit ratings assigned to Vitro SA de CV and its glass containers subsidiary Vitro Envases Norteamerica SA de CV (Vena) to B- from B.

S&P said it also lowered the long-term national-scale corporate credit rating assigned to Vitro to BB+(mx) from BBB-(mx).

The outlook is negative.

S&P said it also lowered the rating assigned to Vitro's notes due 2013 and Servicios y Operaciones Financieras Vitro SA de CV notes due 2007 to CCC from CCC+ while it also lowered the rating assigned to Vena's notes due 2011 to B- from B.

S&P said the rating action reflects its increased concerns regarding the group's liquidity, noting that although it acknowledges the group's refinancing efforts and ongoing initiatives to reduce the debt of the holding company, the continued weakness in the group's operating cash flow generation has increased the importance of asset sales as a source of free operating cash flow to meet upcoming debt maturities, which total about $650 million over the next two years.

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