S&P keeps Mabe on watch

Standard & Poor's said that its BBB- long-term corporate credit rating on Controladora Mabe SA de CV remains on Creditwatch with negative implications, where it was placed on May 21.

The Creditwatch placement followed the announcement by General Electric Co. (AAA/stable/A-1+), 48% owner of Mabe, that it was reviewing strategic options for its appliance business, including a potential sale to a third party, the agency noted.

The Creditwatch placement reflects uncertainties about the future role of GE in Mabe, a factor that we consider a key element in the rating. In 2007, sales to GE represented more than 30%, S& said.

"GE has not announced any final decision regarding the various alternatives that it is evaluating to reposition its appliance business. However, the agency said it is still evaluating the role that Mabe could play in this transaction, including the possibility of the acquisition of other GE appliance assets. This could strengthen Mabe's business risk profile as a result of greater diversity and scale. Still, it could also weaken its key financial indicators, given that the acquisitions would most likely require the company to incur additional debt," said S&P credit analyst Laura Amrtinez.

© 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.