Moody's downgrades Findep

Moody's Investors Service said it downgraded Financiera Independencia, SAB de CV's (Findep) long-term corporate family rating to B2 from B1, and its long-term global local- and foreign-currency issuer ratings and its long-term global foreign-currency senior unsecured debt rating to B3 from B1. The outlook was changed to negative from stable.

“The downgrade of Findep's long-term global issuer ratings and senior unsecured debt rating to B3 from B1, reflects a growing reliance on secured debt financing in the coming months to support its operations, in times of difficult funding conditions for finance companies in Mexico.

“While the firm's recent announcement of its offer to exchange its outstanding senior notes due 2024 will alleviate funding pressure in 2024, the ongoing market confidence crisis that has hurt the sector of non-bank financial companies in Mexico will continue to constrain market access for Findep, reducing firm's currently sound levels of unencumbered assets available for unsecured debt holders, and increasing the dependence on secured funding, which stood at 20% of tangible managed assets in September 2022.

“In Moody's forecasts, the company's lower-than-peers reliance on secured debt could exceed 30% by the end of 2023, weakening the lender's financial profile,” the agency said in a press release.

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