S&P puts SMU on positive watch

S&P said it placed the CCC+ corporate credit rating on SMU SA y Filiales on CreditWatch with positive implications.

The CreditWatch placement reflects the likelihood for an upgrade following the recent completion of the company’s initial public offering.

The company raised 130 billion in Chilean pesos and intends to use the proceeds to pay down debt, which will improve its capital structure, S&P said.

SMU's profitability has risen in the past two years amid sound revenue growth and more efficient operations, the agency said.

The company’s capital injection and improved performance will result in consistent leverage reduction, S&P added.

The potential upside also considers SMU's renegotiation of covenants on its local bonds in October 2016 to levels more consistent with the company's expected performance, the agency said.

© 2015 Prospect News.
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