Fitch assigns Kaltex notes CCC

Fitch Ratings said it assigned CCC/RR4 ratings to Grupo Kaltex, SA de CV's planned $220 million of senior secured notes. The RR4 recovery rating indicates characteristics consistent with securities historically recovering 31%-50% of principal and related interest.

“Kaltex's ratings reflect improved operating results from increased product demand, mainly in the U.S. This was partially due to pandemic recovery, changing fashion trends, and trade and raw material disruptions. In 2021, Kaltex also paid down the principal amount of its 2022 notes to $220 million from $320 million with proceeds from the sale of two subsidiaries, Milano and Revman,” Fitch said in a press release.

“The ratings remain constrained at the CCC category due to high refinancing risk, the cyclicality of the textile industry, input cost price volatility and limitations on rapidly transferring cost increases into prices,” the agency said.

Proceeds will be used to refinance the outstanding amount of the $220 million senior secured notes due April 2022.

The outlook is positive.

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