Fitch lowers El Puerto de Liverpool view to stable

Fitch Ratings said it affirmed El Puerto de Liverpool, SAB de CV's long-term local- and foreign-currency issuer default ratings at BBB+ and has revised the outlook to stable from positive following news that the company will acquire 100% of Suburbia.

Fitch also said it affirmed the company’s long-term national scale rating at AAA(mex), short-term national rating at F1+(mex) and the BBB+ rating on its $300 million senior notes due 2024.

The outlook revision reflects the increase in debt levels for the company enough to fund the acquisition, the agency said.

Fitch said it believes the acquisition will not have an impact on the company’s ratings because of its solid balance sheet and current low leverage.

On a pro forma basis, its adjusted debt-to-EBITDAR ratio would be 2.6x for 2017 and it will trend toward 2.3x to 2x by the end of 2019, the agency explained.

The company plans to fund the Ps.19 billion transaction with a combination of cash and debt, Fitch said.

The addition of Suburbia is expected to strengthen El Puerto de Liverpool’s business position in the medium- to low-income segment, create opportunities to capture synergies and open the possibility to expand its financial business to Suburbia, the agency added.

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