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Moody’s prunes Mega
Moody’s Investors Service said it lowered Operadora de Servicios Mega, SA de CV Sofom ER’s long-term global local- and foreign-currency issuer ratings to B3, from B2, as well as its long-term global foreign-currency senior unsecured debt rating to B3, from B2. The agency also affirmed Mega’s B2 corporate family rating.
“Moody's downgrade of Mega's long-term global issuer ratings and senior unsecured debt ratings to B3, from B2, reflects a growing reliance on secured debt financing amid persistently difficult refinancing conditions for Mexican finance companies in 2023 and 2024 that continue to constrain the access of the segment to international and local markets.
“Mega recently announced an offer to exchange its existing $350 million senior notes due in February 2025 and in light of limited access to unsecured refinancing alternatives, Moody's foresees that liquidity needs will increase the company's reliance on secured market financing options. Mega's dependence on secured funding has increased in the past three quarters, reaching around 15% of tangible assets in June 2023, above the 10% reported in December 2022. Moody's expects that secured funding could reach as much as 30% by the end of 2024,” the agency said in a statement.
The outlook remains negative.
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