S&P lowers Pesquera Exalmar

Standard & Poor’s said it lowered the corporate credit rating on Pesquera Exalmar SAA to B from B+.

The agency also said it lowered the rating on the company’s $200 million senior unsecured notes due 2020 to B from B+.

The outlook is stable.

The downgrades reflect the underperformance of the company’s key credit metrics and cash flow generation amid weaker-than-expected operating conditions in the Peruvian fishing industry over the past 12 months, S&P said.

The closure of the second fishing season in 2014 led to an important decline in fishmeal production volumes and sales during 2015, the agency said.

The company has a debt-incurrence covenant that requires the leverage ratio not exceed 3.5x, S&P said. The company is currently in breach of this covenant, the agency said, and it is expected to linger in the next 12 months.

However, the financing documents include a provision that the company could still incur debt consisting of receivables financing for working capital needs, S&P said.

This continues to support its financial flexibility and ability to access working capital debt to fund its operations, the agency said.

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