S&P lowers Embotellador Atic

S&P said it lowered the corporate credit rating on Grupo Embotellador Atic SA to B- from B.

The agency also said it lowered the rating on the company's $450 million senior unsecured notes due 2022 to B- from B.

The outlook is negative.

Despite Atic's implementation of several initiatives to improve its profitability, the company continues to face sluggish sales volume growth and significant cost pressures, which have weakened margins below expectations, S&P said.

This has tightened Atic's cash flow generation and liquidity position, the agency said.

The company has had more than a $100 million in short-term debt for the past 12 months, S&P said. Together with the company’s sharply weaker credit metrics in 2015, refinancing risks have increased, S&P explained.

Due to operating difficulties, the company's cash flow generation suffered from a combined EBITDA loss of about $33 million at its operations in Mexico, Brazil, Indonesia and Thailand in 2015, the agency said.

This put a dent in Atic's strong cash flows from Peru and Central America, S&P said.

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