Fitch acts on Brazilian auto rental companies

Fitch Ratings said that after conducting a review of a portfolio of Brazilian fleet and auto rental companies, it took actions on JSL SA, Localiza Rent a Car SA and Ouro Verde Locacao e Servico SA.

“The coronavirus outbreak containment measures, such as social distancing and mobility restrictions, are severely impacting the rent-a-car (RaC) business and used car sales. Fitch forecasts revenue in these segments to drop on average between 70% and 90%, respectively, during the second quarter of 2020,” said Fitch in a press release.

Fitch cut JSL’s long-term IDR and local currency IDR to BB- from BB. Also, Fitch lowered the national rating to AA-(bra) from AA(bra). The senior unsecured rating was downgraded to AA- from AA and the national senior unsecured rating to AA-(bra) from AA(bra).

Fitch downgraded Localiza’s local currency long-term IDR to BB+ from BBB-. Fitch affirmed the company’s other ratings.

The agency also affirmed Ouro Verde’s B and BBB(bra) ratings.

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