S&P removes Unifin from watch

S&P said it removed its Unifin Financiera SAB de CV ratings from CreditWatch with negative implications, where they were placed on March 16. The outlook is negative. The agency also affirmed Unifin’s B+ issuer and B+ senior unsecured and CCC+ subordinated perpetual notes ratings.

On Wednesday, Unifin and its bondholders agreed to extend the maturity of the company’s $200 million of international unsecured notes to May 2024 from August.

“Additionally, the principal amount remains unchanged, as well as the debt's seniority, interest rate, and timing of interest payments (semiannual). In our opinion, the investors are compensated for the extended tenor. On the other hand, we don't consider the lender was dependent on debt restructuring to avoid a default. This is because this debt represented only about 5% of Unifin's financial liabilities, and there were other mechanisms available to address this maturity. Therefore, we consider Unifin's debt restructuring as a treasury management strategy, rather than a distressed restructuring,” S&P said in a press release.

The outlook mirrors a weaker global investor appetite for regional nonbank financial institutions' debt and Unifin's heavy reliance on market debt. “In this sense, we view a one-in-three chance of the lender's downgrade in the next 12 months if its funding plans don't materialize, depleting its liquidity,” the agency said.

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