S&P raises Grupo Gicsa

S&P said it raised it raised Grupo Gicsa SAB de CV’s issuer ratings to CCC+ from CCC and its national scale issuer credit rating on Gicsa to mxB from mxCCC. The agency also upgraded the issue-level rating to mxB from mxCCC on the company's senior notes Gicsa 15, Gicsa 17 and Gicsa 19 and removed the ratings from CreditWatch with negative implications.

Last month Gisca reached a final agreement with its bondholders modify its five outstanding local bonds. S&P said it does not consider the agreement the equivalent of default.

“Gicsa's financial performance should gradually improve, although its capital structure may be unsustainable in the long term. With the agreement with bondholders, Gicsa now benefits from a longer debt maturity profile that will help alleviate liquidity pressures. Also, new terms such as the capitalization of interest payments will support cash flow generation. However, we consider that Gicsa has a limited capacity to accelerate top-line growth in the next few years, which will keep leverage metrics close to 10x and its EBITDA interest coverage ratio below 1.3x,” the agency said in a press release.

The outlook is stable.

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