Fitch downgrades Grupo Kaltex

Fitch Ratings said it downgraded Grupo Kaltex, SA de CV’s long-term local and foreign currency issuer default ratings to B from B+ and $320 million senior secured notes due 2022 to B/RR4 from B+/RR4.

All ratings were placed on rating watch negative.

Fitch said the downgrade reflects Grupo Kaltex's operational and financial position deterioration during 2017 beyond the agency’s expectations, which has led to a weakening of its credit profile.

The deterioration is the result of a combination of lower sales volume and constant main input cost increases. EBITDA for the latest 12 months at Sept. 30, 2017 was Ps. 1,367,000,000, a reduction from Ps. 2,034,000,000 at year-end 2016. This resulted in a total adjusted debt to EBITDAR of 5.5 times compared to an expectation of below 4.5 times.

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