Fitch upgrades InterCement

Fitch Ratings said it upgraded InterCement Participacoes SA's long-term foreign and local currency issuer default ratings to BB- from B+ and long-term national rating to A(bra) from A-(bra).

The agency also upgraded Cimpor Financial Operations BV's unsecured notes due 2024 to BB- from B+/RR4.

The outlook is stable.

Fitch said the upgrade reflects the improvements in InterCement's capital structure following the IPO of its subsidiary in Argentina and ongoing liability management strategies, which have reduced refinancing risks.

“Fitch's base case scenario expects InterCement's net adjusted leverage to fall to around 4.4x at year-end 2017 from 7.1x in 2016. Absent any additional equity inflow, net leverage is expected to remain relatively stable during 2018,” the agency said in a news release.

“InterCement's management continues to look for alternatives to raise an additional €500 million by minority stake disposal at its luso-african subsidiaries, which if successful, would reduce its net adjusted leverage to around 3.0x, per Fitch's calculations.”

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