Moody's reviews Soriana

Moody's Investors Service said it placed on review for downgrade Organizacion Soriana, SAB de CV's Ps. 5.5 billion certificados bursatiles due 2012 and Ps. 4.6 billion certificados bursatiles due 2010 rated Baa2/Aa2.mx and short-term debt of up to Ps. 6 million under the company's Ps. 15 billion certificados bursatiles program at MX-1.

The review was prompted by deterioration of Soriana's liquidity profile in recent months, caused by an unexpected shift toward more aggressive commercial paper issuance, which the agency said more than offset liquidity benefits from the placement of Ps. 10.1 billion medium term certificados bursatiles in June and September.

Ratings are supported by the company's position as Mexico's second-largest food retailer, the defensive nature of the food retail business, proven execution abilities and certain benefits from last year's acquisition of Gigante, the agency said.

These strengths are partly offset by the challenges of turning around and smoothly integrating the recently acquired Gigante operations and reducing financial leverage within one to two years to levels acceptable for the Baa2 category, the agency noted.

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