Fitch slashes Americanas

Fitch Ratings said it downgraded Americanas SA's long-term foreign-currency and local-currency issuer default ratings to CC from BB and its long-term national scale rating to CC(bra) from AA+(bra). Fitch also slashed the rating of the senior unsecured global notes issued by its wholly owned subsidiaries JSM Global Sarl and B2W Digital Lux Sarl to CC/RR4 from BB and the rating of Americanas' unsecured debentures to CC(bra) from AA+(bra).

“The downgrade to CC follows Americanas' disclosure that inconsistencies were detected in accounting entries that reduced the balance of its suppliers' accounts over several years by an estimated R$20 billion. These accounting inconsistencies relate to reverse factoring. These additional liabilities on a pro forma basis would increase Fitch's net adjusted debt/EBITDAR ratio for Americanas to 11.9x for the LTM ended Sept. 30, 2022, from the previously calculated ratio of 5.5x,” Fitch said in a press release.

Fitch said it is likely Americanas will enter a standstill agreement with its creditors given the unsustainable capital structure and the damage to the company’s reputation. “The company's ratings would be downgraded to C if this should transpire.”

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