S&P turns Idesa view to negative

S&P said it changed its outlook for Grupo Idesa SA de CV to negative from stable and affirmed the CCC+ ratings on the company and its senior secured notes. The 4 recovery rating (30%-50%; rounded estimate 35%) on the notes is unchanged.

“Idesa has been amortizing its debt and complying with its financial obligations since its debt refinancing in May 2020, which incorporated a payment-in-kind (PIK) interest payment mechanism that lowered the company's interest payments until November 2023, easing liquidity pressures. Nevertheless, we believe that the debt's amount is still unsuitable for the company's cash flow generation capacity,” the agency said in a press release.

The outlook indicates the possibility of an increasing risk of default unless Idesa improves its cash flows and its liquidity, or cuts its debt, S&P said.

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