Fitch trims Morocco

Fitch Ratings said it downgraded Morocco’s long-term local- and foreign-currency issuer default ratings to BB+ from BBB-. The agency also downgraded the country’s senior unsecured rating to BB+ from BBB-.

“The downgrade reflects the severe impact of the coronavirus pandemic on Morocco’s economy and public and external finances. A fall in fiscal revenues and a historically large GDP contraction will prompt a sizeable rise in government debt, while the hit to manufacturing and tourism will cause a significant worsening in the current account deficit and net external debt from already high levels, Fitch said in a press release.

Fitch’s forecast considers offsetting measures envisaged by the authorities through a new solidarity levy on personal income and business profits, expenditure reallocation, payroll-management measures and increased partnership with the private sector for public investment, the agency said.

The outlook is stable.

Fitch downgrades Pan Brothers

Fitch Ratings said it downgraded PT Pan Brothers Tbk.’s long-term issuer default rating to B- from B. At the same time, Fitch downgraded Pan Brother’s national long-term rating to BBB-(idn) from A-(idn). The agency placed the ratings on rating watch negative.

“The downgrade reflects pressure on PB’s liquidity and the elevated refinancing risk associated with its $138.5 million credit loan facility due February 2021 and $171 million bond due January 2022, which was issued by its subsidiary, PB International BV,” Fitch said in a press release.

Pan Brothers is refinancing its credit loan facility and is exploring various strategies for the bond. “However, given the market uncertainty and limited runway to maturity, we have placed the ratings on RWN. We expect to resolve the RWN upon a successful refinancing of the facility, provided PB’s liquidity position does not deteriorate further,” Fitch said.

S&P cuts Peru LNG

S&P said it downgraded Peru LNG Srl to B- from B.

“Our ratings reflect PLNG’s very high leverage, subdued cash flow generation, and what we now see as a more gradual deleveraging path well into 2022. Although our revised base case incorporates the recovery of natural gas prices from record-low levels in 2020, the recovery pace now results in a more gradual deleveraging than we originally forecasted,” S&P said in a press release.

The agency now forecasts EBITDA of $45 million-$50 million in 2020 versus $80 million-$90 million in its previous base case and about $100 million in 2021.

“This would lead to debt to EBITDA close to 18x in 2020 (compared to 9x-10x in our previous forecast), recovering to about 8.5x in 2021 and 6x in 2022. This deleveraging path is slower than the one resulting from our previous forecast of near 7.5x in 2021,” S&P said.

The outlook is negative.

S&P trims Ras Al Khaimah

S&P said it lowered its long-term foreign and local currency sovereign credit ratings on the Emirate of Ras Al Khaimah to A- from A.

“The downgrade reflects our view that risks to RAK’s economic position relative to peers have increased. We forecast a 5% contraction of the real economy in 2020, exacerbating already-weak per capita growth. A modest recovery amid relatively weak domestic and external demand, softened by the pandemic and relatively low oil prices, will result in 2020-2023 growth being lower than the 2014-2019 average of 2.7%. This will reduce wealth levels and, consequently, debt-bearing capacity,” S&P said in a press release.

“Despite risks to RAK’s fiscal position, we note its track record of fiscal prudence and commitment to preserving a fiscal surplus, which we forecast the government will maintain through proactive policymaking. While it lacks fiscal flexibility on the revenue side, it does have flexibility on the expenditure side,” the agency said.

The outlook is stable.

S&P lowers Sharjah

S&P said it lowered its long-term foreign and local currency sovereign credit ratings on the Emirate of Sharjah to BBB- from BBB.

“The downgrade reflects our view that Sharjah’s fiscal position is weakening. We expect the government’s interest burden will increase to about 17% of revenue by 2023, up from about 12% in 2020, as interest payments rise in line with higher debt levels,” S&P said in a press release.

Despite S&P’s forecast for an economic contraction in 2020, Sharjah’s economy remains relatively diversified compared with other sovereigns in the region, which should support a modest recovery in growth over the forecast period, the agency said.

The outlook is stable.

S&P revises Azerbaijan to negative

S&P said it revised Azerbaijan’s outlook to negative from stable but affirmed its BB+ long-term sovereign credit rating.

“The negative outlook reflects rising risks to Azerbaijan’s fiscal performance, external balance sheet, and macro-financial stability amid the significant recent military escalation of the Nagorno-Karabakh conflict, which may take quite some time to resolve,” S&P said in a press release.

Fitch assigns FBN Finance notes B-

Fitch Ratings said it assigned FBN Finance Co. BV’s $350 million of 8 5/8% senior note participation notes due 2025, a final B- rating. FBN Finance is a special purpose vehicle established to provide funding for the First Bank of Nigeria Ltd. FBN’s other ratings are unaffected.

The rating is in line with FBN’s long-term issuer default rating of B-, Fitch said.

FBN is using the proceeds for general-banking purposes, including the refinancing of debt.

Fitch acts on Chilean banks

Fitch Ratings said it took rating actions on selected Chilean bank and non-bank financial institutions following the country’s sovereign rating downgrade on Oct. 15.

Fitch downgraded the senior unsecured debt ratings for Banco Santander Chile and Banco de Credito e Inversiones to A- from A due to the same rating action on the banks’ issuer default ratings. “The senior unsecured bonds are rated at the same level as the bank’s IDRs, as the likelihood of default of the senior debt is the same as that of the issuer,” Fitch said in a press release.

Fitch affirmed Tanner Servicios Financieros’ long-term senior unsecured rating of BBB-. Like, the two banks above, the senior unsecured debt is rated at the same level as its long-term IDRs, as the likelihood of default of the senior debt is the same as that of the issuer, the agency said.

The outlook for the three institutions is negative.

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