Downgrade...
Fitch Downgrades Credito Real at 'BB-'; Places on Rating Watch Negative
Thu 18 Nov, 2021 - 5:30 PM ET
Fitch Ratings has downgraded Credito Real, S.A.B. de C.V., SOFOM, E.N.R.'s (Credito Real) Long-Term (LT) Foreign and Local Currency Issuer Default Rating (IDRs) to 'BB-' from 'BB' and were placed on Rating Watch Negative (RWN). The Short-Term (ST) IDRs were affirmed at 'B'. The senior unsecured debt and hybrid notes were also downgraded and place on RWN. The LT and ST national scale ratings have also been downgraded to 'A-(mex)' from 'A(mex)' and to 'F2(mex)' from 'F1(mex)', respectively, and both were placed on RWN.
Credito Real's rating downgrade is driven by heightened refinancing risk and worsened funding conditions. Some of the previously proposed strategies to address the CHF170 million senior unsecured bond maturity in February 2022 have not fully materialized since Fitch's last rating action on Sept. 28, 2021. The RWN reflects the execution risk to the detailed alternatives that the company has shared with the agency, as a relevant portion is contingent on market's appetite and conditions.
Fitch will continue to monitor closely within the next several weeks the refinancing risk evolution and the company's actions to address it, and further negative rating actions cannot be ruled out if Fitch does not assess a stabilization of the funding and liquidity pressures.