Moody's rates Megatone bonds B3

Moody's Latin America said it assigned a B3 global scale rating and an A2.ar Argentina national scale rating to Electronica Megatone SA's proposed 30 million Argentine peso local bond issuance and affirmed the company's B3 corporate family rating and A2.ar Argentina national scale rating.

The outlook is stable.

Proceeds from the notes will be used principally for Electronica Megatone's working capital needs, to refinance outstanding short-term debt and for general corporate purposes.

The agency said the ratings are supported by the company's position as one of the main dedicated consumer electronics and appliance retailers in Argentina, diversified product mix, low adjusted leverage and well-established relationships with suppliers.

The ratings are constrained by Electronica Megatone's retail finance model, with significant credit exposure to consumer loans extended through Megatone's own financing source; its relatively small scale; its limited geographic diversification; and the competitive environment, Moody's said.

The total adjusted debt-to-EBITDA ratio was 1.9 times as of the last 12 months ended May 31.

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