S&P lowers Embotelladora Atic

Standard & Poor’s said it lowered the long-term corporate credit rating on Grupo Embotelladora Atic, SA to B from BB-.

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

The outlook is stable.

The two-notch downgrade reflects a sharp drop in the company’s financial performance in 2015, relative to the baseline forecast, S&P said.

These metrics will remain highly leveraged over a three-year horizon, in line with expectations, the agency said.

Atic’s weaker-than-expected results mainly stem from the underperformance of volume sales in some countries in which it operates due to an increasingly challenging competitive environment, S&P said.

Exchange rate volatility in most countries where Atic operates also eroded the company’s operating margins, the agency added.

The stronger dollar has created a higher burden on interest expenses, which directly affect cash flow generation, S&P said.

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