S&P lowers InterCement Brasil

S&P said it lowered the global scale long-term issuer credit rating on InterCement Brasil SA. to B+ from BB-.

The agency also said it lowered the national scale rating to brAA from brAA+.

The outlook is now stable.

S&P also said it lowered the rating on Cimpor Financial Operations BV's notes to B+ from BB-, which InterCement and InterCement Participacoes fully guarantee.

The recovery rating on these notes remains at 3, indicating 50% expected default recovery.

InterCement is one of the main subsidiaries of InterCement Participacoes and accounts for about 40% of the group's total assets, S&P said.

The agency said it deems it as a core subsidiary.

The ratings reflect the company's installed capacity, market position and the long-term growth prospects for the cement market in the country, S&P said.

The downgrade reflects a view that weak macroeconomic conditions in Brazil and Argentina in 2018 will dent the group's overall cement sales and profitability, leading to weaker-than-expected credit metrics and to pressured liquidity position over the next 12 months, the agency explained.

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