S&P lowers Grupo Kaltex

S&P said it lowered its long-term issuer credit rating on Grupo Kaltex, SA de CV to B- from B and also lowered the issue-level rating on the company's $320 million senior secured notes due 2022 to B- from B.

The recovery rating of 3, indicating an expectation of meaningful (50%-90%; rounded estimate 65%) recovery prospects for the bondholders in the event of a payment default, remains unchanged. The outlook on the corporate credit rating remains negative.

“In the past nine months, Kaltex's operating performance has suffered from soft demand from key customers, higher cotton prices, chemicals, and energy, as well as exchange rate volatility. This has resulted in lower-than-expected profitability that's pressuring Kaltex's cash flow generation and liquidity and limiting the company's capacity to reduce its high leverage,” S&P said in a news release.

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