Fitch Downgrades Controladora Comercial Mexicana IDRs to 'D'

MONTERREY, Mexico--(BUSINESS WIRE)--Fitch Ratings has downgraded the Issuer Default Ratings (IDRs) and outstanding debt ratings of Controladora Comercial Mexicana, S.A.B. de C.V. (CCM) as follows:

--Local currency IDR to 'D' from 'BB';

--Foreign currency IDR to 'D' from 'BB';

--US$200 million senior notes due 2015 to 'CC' from 'BB';

--MXN 3,000 Million senior notes due 2027 to 'CC' from 'BB';

--Long-term National Scale to 'CC(mex)' from 'A(mex)';

--Short-term National Scale to 'D(mex)'; from 'F1(mex)'.

The rating actions follow CCM's failure to pay a commercial paper (CP) maturity (Certificados Bursatiles) in the amount of $400 million pesos ($30.1 million) due to its inability to roll-over this maturity and recently announced negative effects from currency exchange movements. CCM's outstanding senior notes are current. Although the CP default will likely trigger a cross-default, acceleration of the outstanding notes is unclear at this time. CCM has not disclosed any additional information on the magnitude of its foreign exchange loss announced yesterday.

CCM is one of the largest Mexican food retailers, with revenues of US$5.05 billion for the last twelve months (LTM) ended June 30, 2008. CCM operated a total of 217 stores, the majority of which are located in Central Mexico (including Mexico City) also as of June 30, 2008. CCM operates seven store formats: Comercial Mexicana, a service-oriented supermarket; Mega, a hypermarket; Bodega and Alprecio, value-priced supermarkets; Sumesa, a value-priced neighborhood supermarket; Costco, under a joint venture with Costco Wholesale Corp. and City Market, a high purchasing power segment supermarket. In addition, CCM operates a chain of 73 family-style restaurants.

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