Moody’s changes InRetail view

Moody's Investors Service said it changed InRetail Consumer's outlook to negative from stable and affirmed the Ba1 corporate family rating and the Ba1 rating of its senior notes due 2021.

The agency said the action follows the announcement that InRetail Consumer's drugstore subsidiary Inkafarma will acquire Quicorp SA for a total amount of $583 million.

The change in outlook reflects the deterioration in InRetail Consumer´s credit metrics pro-forma for the acquisition of Quicorp, Moody’s explained.

“Accordingly, we expect leverage as measured by adjusted gross debt to EBITDA will increase to 4.8 times in 2018 from 3.6x as of the last twelve months ended September 2017,” the agency said in a news release.

“In addition, given Quicorp’s current low adjusted EBITDA margins, at 4.5% in 2017 compared to 8% for Inkafarma in the same period, we anticipate that the deleveraging process will be gradual, approaching 4x over the next 24 months.”

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