Moody’s downgrades Mills, debt to B3

Moody's America Latina said it downgraded Mills Estruturas e Servicos de Engenharia SA's corporate family ratings and senior unsecured ratings to B3 on the global scale and B2.br on the national scale from B2 and Ba2.br, respectively.

The outlook remains negative.

“The downgrade reflects our expectations that Mills' operating performance will remain weak through at least 2018, which mirrors the fundamentals for the company's key heavy construction and homebuilding industries,” Moody’s said in a news release.

“Mills has been downsizing over the last few years, selling assets and keeping investment low to generate cash and meet debt obligations. While we acknowledge that the short cycle of Mills' investments provides the company flexibility to efficiently react to slowdowns by selling assets, this model is unsustainable if the downturn persists for a longer than anticipated period of time.”

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