S&P affirms Empresas ICA

Standard & Poor's said it affirmed the BB- long-term corporate credit rating on Empresas ICA SAB de CV and its mxBBB+ national scale long-term corporate credit rating.

The outlook is stable.

"Our ratings reflect the inherent cyclicality of the construction industry in Mexico and the company's dependence on Mexican government infrastructure spending to sustain its backlog," S&P analyst Fabiola Ortiz said in a statement.

Ratings also consider the payment waterfalls of project-company obligations and the risk of operating losses and swings for cost overruns, the agency said, as well as the concentration of mortgage origination in public-housing agencies and the intense working capital required in the Mexican homebuilding industry.

ICA's position as the largest engineering, construction and procurement company in Mexico offsets these factors, the agency noted.

Ratings also benefit from the company's investments in concessions and a financial policy that favors project debt over corporate debt, S&P said.

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