S&P cuts Grupo Gicsa

S&P said it downgraded Grupo Gicsa SAB de CV’s global issuer rating to B- from B and its national scale rating to mxB from mxBBB-. The agency also lowered the issue-level rating to mxB from mxBBB- on the company's senior unsecured notes Gicsa 15, Gicsa 17 and Gicsa 19.

Concurrently, S&P placed the ratings on CreditWatch with negative implications.

The agency noted that as of March 31, Gisca reported Ps. 566 million in unrestricted cash and equivalents; however, about Ps. 2.7 billion of debt matures in the next 12 months.

“Despite an estimated improvement in operations in recent months, we don't expect liquidity sources to materially improve in the next 12 months unless the company progresses in the monetization of assets. The company is exploring alternatives to improve its capital structure and liquidity position; nevertheless, Gicsa's plans are not yet defined and remain unclear,” S&P said in a press release.

The CreditWatch reflects the increased risk of another downgrade by one or more notches over the next 90 days unless the company implements a refinancing plan or significantly increases its cash balance through proceeds from asset disposals to alleviate its liquidity position, the agency said.

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