Fitch lowers Grupo Embotellador

Fitch Ratings said it downgraded Grupo Embotellador Atic SA’s foreign- and local-currency issuer default ratings to BB from BB+.

Fitch also said it downgraded the BB+ rating of Ajecorp BV’s $450 million notes due in 2022 to BB.

Ajecorp is a wholly owned subsidiary of Atic and is incorporated in the Netherlands as a limited liability company. Ajecorp’s 2022 notes are unconditionally guaranteed by Atic and its key operating subsidiaries.

The outlook is negative.

The downgrades reflect Atic’s weak performance, particularly in Brazil and Mexico, as well as an increased net leverage ratio of 4.7x, Fitch said.

The downgrades also consider the integration of Atic’s Indonesian operations into the guarantee is less positive than initially expected, the agency said.

Fitch also said it remains concerned about Atic’s weak free cash-flow generation due to sluggish macroeconomic environments in Peru, Brazil, Mexico and Venezuela.

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