Fitch: D&S outlook negative

Fitch Ratings said it affirmed Distribucion y Servicio D&S SA's foreign- and local-currency issuer default rating at BBB, long-term national scale rating at AA-(Chl) and short-term national scale rating at F1+(Chl).

The national scale equity rating was affirmed at Level 1.

The outlook was revised to negative from stable.

The outlook incorporates the softening macroeconomic environment, which is expected to intensify and reinforce recent negative trends for same store sales, according to the agency.

The profitability of D&S' consumer finance business will likely come under pressure as the weakening economic growth may increase delinquencies and net charge-offs, the agency said.

For the 12 months ended Sept. 30, total adjusted debt-to-EBITDAR ratio was 4 times.

Ratings are supported by the company's dominant competitive position in the Chilean food retail industry, the agency said, as well as economies of scale advantages over competitors in purchasing and distribution.

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