Moody's downgrades Mills

Moody's America Latina said it downgraded Mills Estruturas e Servicos de Engenharia SA's corporate family rating and senior debentures to Ba3 from Ba2 on the global scale and to A3.br from Aa3.br on the national scale. The outlook was changed to negative from stable.

The agency said the downgrade and change in outlook reflect the expected negative impact on the company's future operating performance as a consequence of its exposure to the Brazilian heavy construction and homebuilding industries.

Mills' small size relative to global peers and its high dependence on the cyclical construction industry are constraining factors to the rating, the agency said.

Mills' Ba3/A3.br corporate family rating incorporates its leading position in the Brazilian concrete formwork and tubular structures sector, strong operating margins based on a track record of high capacity utilization, prudent financial management, moderate dividend payout policy and currently comfortable liquidity, Moody’s said.

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