Moody's trims Axtel

Moody's Investors Service said it downgraded Axtel, SAB de CV 's corporate family rating and senior unsecured ratings to B2 from B1.

The downgrades conclude the review started on July 8, prompted by the company's weakening credit profile, which along with the spin-off from parent company Alfa, SAB de CV, and a more challenging operating environment heighten the refinancing risk for its nearly $420 million of 2024 notes, the agency. Moody’s noted Axtel is working within its liability management plan but has not yet closed any agreement with financial institutions.

“The downgrade reflects the expectation that Axtel's credit metrics will remain weak through 2023; with leverage above 4x and interest coverage measured EBITDA minus capex to gross interest expense below 1.5x, which better positions the company in the B2 rating category,” Moody’s said in a press release.

The agency said it assigned a negative outlook citing Mexico’s currently low economic growth and tight capital markets for emerging market debt since Russia invaded Ukraine.

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