Fitch: Merger could be negative for GFNorte, Banorte

Fitch Ratings said a potential final agreement among Grupo Financiero Banorte (GFNorte) to acquire, merge and/or integrate Ixe Grupo Financiero could have negative rating implications for GFNorte and its subsidiaries, including Banco Mercantil del Norte SA, over the near term, while the ratings of Ixe Grupo and its subsidiaries could eventually benefit.

The parties recently announced a preliminary non-binding agreement and the starting of a due diligence process that could result in Ixe Grupo being absorbed by and integrated into GFNorte, Fitch said.

When and if this final agreement is reached, GFNorte's foreign- and local-currency long-term issuer default rating of BBB and short-term issuer default rating of F2 will likely be placed on Rating Watch negative. The same applies to Banorte, which has similar issuer default ratings, Fitch said.

The national scale ratings of Banorte and other of GFNorte's subsidiaries, including Arrendadora y Factor Banorte, Seguros Banorte Generali and Casa de Bolsa Banorte, would also be placed on Rating Watch negative, as these are driven by support considerations relative to Banorte's credit quality.

But, Fitch also said it considers that this transaction would be strategically positive for GFNorte as it should enhance over time its competitive, commercial and financial position amid an increasingly challenging operating environment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.