S&P lifts Empresas Copec

S&P said it raised Empresas Copec SA’s (E-Copec) issuer rating to BBB from BBB- and revised the outlook of subsidiary Copec SA to positive from stable and affirmed its BBB- rating.

“After completing a high investment period, E-Copec reduced leverage to 2x as of June 2022, the lowest level in decades. Our revised projections now assume leverage will remain around 2x and that the company will report positive discretionary cash flow during 2022-2024. Our forecasts incorporate still strong pulp prices, robust demand for wood products, and strong volumes and extraordinarily high margins in the fuel business,” S&P said in a press release.

The agency noted Copec boosted volumes by about 15% in the first half 2022 compared with the first half 2021, and continues posting sales volumes well above pre-pandemic levels. “This, coupled with the high prices and cost control efforts, has increased EBITDA and reduced the debt-to-EBITDA ratio significantly to 2x in June 2022. We now expect the company to keep this ratio around 2x and overall strong credit metrics.”

Fitch upgrades Mozambique

Fitch Ratings said it upgraded Mozambique's long-term foreign-currency issuer default rating to CCC+ from CCC. The agency typically does not assign outlooks to sovereigns with a CCC+ rating or below and removed the long-term IDRs from under criteria observation.

“Mozambique's financing constraints have eased substantially with the agreement of a three-year $456 million Extended Credit Facility with the IMF, with $91 million to be disbursed in 2022. Fitch expects this program to unlock additional concessional funding from multilateral partners, including the World Bank, after years of restricted access to external funding sources following the ‘hidden debts’ scandal of 2016,” Fitch said in a press release.

“This easing of Mozambique's external funding constraints coincides with an increase in the country's external debt servicing costs in 2022 and onwards, after the expiration of the Debt Service Suspension Initiative (DSSI) in December 2021,” the agency said.

Fitch upgrades Ukrainian Railways

Fitch Ratings said it upgraded Ukrainian Railways' long-term foreign-currency issuer default rating to CC from C. The agency does not usually assign outlooks at this level due to their high volatility.

The upgrade follows a similar action on Ukraine's sovereign ratings on Aug. 17, Fitch said. The agency considers the railroad to be a government-related entity.

Fitch upgrades Ukrenergo notes to CC

Fitch Ratings said it upgraded Ukrenergo's state-guaranteed notes' senior unsecured rating to CC from C following the restructuring of its $825 million of bonds. The notes' recovery rating remains unchanged at RR4.

“The upgrade follows the restructuring of Ukraine's debt (see 'Fitch Upgrades Ukraine to CC’ at www.fitchratings.com),” the agency said in a press release.

Fitch also assigned Ukrenergo a CC long-term issuer default rating.

S&P shifts Sagicor outlook to positive

S&P said it changed its outlook for Sagicor Financial Co. to positive from stable and affirmed its BB+ ratings.

Sagicor agreed to buy ivari, which will represent about 50% of its assets and liabilities, 40% of equity, and 30% of premiums.

“The positive outlook reflects the likelihood of an upgrade if the proposed acquisition closes as planned. This is because we believe it would add value to Sagicor's credit profile given the prospective business and geographic diversification, ivari's good capital adequacy, and better asset quality in the group's investment portfolio,” S&P said in a press release.

Fitch puts Sagicor on positive watch

Fitch said it placed Sagicor Financial Co. Ltd.’s BB issuer rating and BB- senior unsecured debt ratings on rating watch positive.

“This follows the company's announcement of its intended acquisition of ivari, a leading middle-market insurer in Canada, and reflects prospective improvement in the credit quality of SFC's insurance operating company group. The transaction is expected to close in the next six to 12 months, subject to regulatory approval,” Fitch said in a press release.

Fitch pulls mBank from watch

Fitch Ratings said it affirmed mBank SA's long-term issuer default rating at BBB-, removed it from rating watch negative and assigned a negative outlook. Fitch also downgraded the bank's national long-term rating to A(pol) from A+(pol). The outlook on the national long-term rating is negative.

The agency said it does not consider the operating environment and pre-existing pressures tied to the bank's exposure to foreign-currency mortgages severe enough to warrant an immediate downgrade of the bank's issuer rating.

Fitch said it trimmed the bank's national long-term rating because the pressures coming from the operating environment, coupled with the bank's exposure to legal risk from its foreign-currency exposures, mean the bank's credit profile has deteriorated inside the BBB- rating and relative to other Polish issuers'.

The negative outlook reflects the downside risk to the bank’s credit profile. “These include the potential for a higher-than-currently expected volume of further legal cases brought by FC mortgage borrowers, the risks of further potential intervention in the banking sector by the Polish authorities, and the possible broader impact of a weaker economy, which could exert stronger-than-currently anticipated pressure on mBank's profitability and capital position,” the agency said in a press release.

DBRS turns Slovak Republic trend to negative

DBRS said it changed Slovak Republic’s trend to negative from stable and confirmed its ratings at A (high).

“The trend change reflects DBRS Morningstar’s expectation of a weaker macroeconomic performance for the Slovak economy in the medium term, which could be further constrained by (1) the possible full stoppage of Russian gas supplies along with (2) lower external demand for Slovak exports,” the agency said in a press release.

Fitch revises CATL outlook to positive

Fitch Ratings said it revised the outlook on Contemporary Amperex Technology Co., Ltd.’s to positive from stable and affirmed the BBB+ issuer and senior unsecured ratings.

“The positive outlook reflects Fitch's expectation that CATL may trend toward neutral free cash flow (FCF) generation following its capacity ramp-up phase. We forecast leverage, measured by net debt/EBITDA, to stay within 1x, with equity funding partially offsetting negative FCF,” the agency said in a press release.

Fitch revises Gabon outlook to positive

Fitch Ratings said it revised the outlook on Gabon to positive from stable and affirmed its long-term foreign-currency issuer default rating at B-.

“The revision of the outlook reflects improvement in Gabon's fiscal trajectory, given higher oil revenue and continued restraint with current spending, anchored by an IMF program. We expect higher oil prices, control of spending and better mobilization of non-oil revenues will improve Gabon's fiscal metrics and debt/GDP will remain on a downward path,” the agency said in a press release.

Gabon’s weak history of public finance management and reliance on oil revenues strain Gabon's B- rating.

Moody's alters Ultrapar view to stable

Moody's Investors Service said it changed Ultrapar Participacoes SA's outlook to stable from negative and affirmed its Ba1 corporate family rating and the Ba1 rating on the backed senior unsecured notes issued by Ultrapar International SA, guaranteed by Ipiranga Produtos de Petroleo SA and Ultrapar.

“The change in the outlook to stable reflects an improvement in Ultrapar's capital structure following a reduction in its debt balance and the expectation of improving EBITDA generation in 2022 and 2023. By year-end 2022 Moody's expects Ultrapar to reach a gross leverage of 3.3x compared to 3.4x in the LTM ended June 2022. Moody's believes the changes in management, undertaken since late 2021, will allow Ipiranga to improve its competitive position and return to a higher level of profitability,” the agency said in a press release.

Fitch corrects Mapletree release

Fitch Ratings said it corrected the issuer from an earlier release on Mapletree Logistics Trust’s Singapore-denominated notes.

The notes will be issued by MapletreeLog Treasury Co. Pte. Ltd., a subsidiary of Mapletree Logistics Trust.

The agency also affirmed the trust’s long-term issuer default rating at BBB+.

The outlook is stable.

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