Fitch: Latin American Leveraged Finance Credits Face Difficult Operating and Market Conditions

CHICAGO--()--Latin American leveraged finance credits are expected to face challenging conditions in 2015 due to weak economic growth in the region, according to Fitch Ratings.

'Fitch anticipates multiple downward rating actions in 2015 within its portfolio of rated high-yield Latin American corporates,' said Joe Bormann, Managing Director at Fitch.

'Default risk is at a high point with 13% of leveraged finance corporates in Latin America having a rating of 'CCC' or lower. Brazil is at the forefront of the negativity with a high degree of pressure on construction companies, as well as sugar and ethanol producers.'

Refinancing risk is currently elevated for small, high-yield corporates rated 'B+' or lower that issue bonds of less than $400 million. Volatility in the market during 2014 led investors to seek benchmark-sized bonds with secondary market liquidity. Posadas is the only small, high-yield issuer with a bond falling due in 2015. Arendal ($80 million), Bio-PAPPEL ($250 million), Ceagro ($100 million) and Marfrig ($375 million) comprise the list of 'B' rated issuers with non-benchmark-sized bonds maturing in 2016.

For more information on these topics and a detailed summary of all Latin America high yield corporate credits, a special report titled 'Latin America Leveraged Finance Stats Quarterly' is available on the Fitch Ratings web site at www.fitchratings.com, or by clicking on the link.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Latin America Leveraged Finance Stats Quarterly (First-Quarter 2014)'dated Aug. 12, 2014;

--'Latin America Leveraged Finance Stats Quarterly (Second-Quarter 2014) dated Dec. 15, 2014.

Applicable Criteria and Related Research: Latin America Leveraged Finance Stats Quarterly (Fourth-Quarter Review)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=861356

Latin America Leveraged Finance Stats Quarterly

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=753113

Latin America Leveraged Finance Stats Quarterly (Second Quarter 2014)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=815188

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Contacts

Fitch Ratings
Joe Bormann, CFA
Managing Director
+1-312-368-3349
joe.bormann@fitchratings.com
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Paula Bunn
Analyst
+55 21 4504-2218
paula.bunn@fitchratings.com
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Joe Bormann, CFA
Managing Director
+1-312-368-3349
joe.bormann@fitchratings.com
Fitch Ratings, Inc.
70 W Madison Street
Chicago, IL 60602
or
Paula Bunn
Analyst
+55 21 4504-2218
paula.bunn@fitchratings.com
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com