Moody's lowers Americanas

Moody's Investors Service said it downgraded to Ba2 from Ba1 Americanas SA's corporate family rating and the ratings for senior unsecured notes issued by JSM Global Sarl and B2W Digital Lux Sarl, both guaranteed by Americanas. The outlook was changed to negative from stable.

The downgrade follows the erosion in the company's interest coverage and other debt protection credit metrics such as leverage and retained cash flow to net debt, the agency said. Moody’s forecasts the problems will persist for the next 12 to 18 months.

“Moody's has observed a sharp increase in interest expense because of higher interest rates in Brazil. Despite the evolution of sales, better gross margin and increasing EBITDA, these will not be sufficient to mitigate the higher interest cost in the near term. Moody's believes interest expense will more than double to R$3 billion in 2022 compared to R$1.4 billion 2021,” the agency said in a press release.

The weaker outlook considers the potential that credit metrics do not recover from current levels or remain below expectations for 2023, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.