Credito Real Downgraded to B- by S&P

Credito Real was downgraded to B- from B+ on increased refinancing risk and weaker liquidity. Credito Real has CHF 170mn ($185.7mn) of its 2.875% 2022s due on February 9 with S&P expecting the lender’s liquidity strengthening initiatives to build up internal funds. However, it has failed to accumulate a sufficient cash buffer. The initiatives included raising funds in Swiss francs, securing loans, and a larger amount of portfolio sales–have failed to materialize in the last few weeks. Besides, Credito Real has not received the regulator’s approval for the sale of MXN 1.5bn ($72.6n) of its SME loan portfolio, thereby heightening its liquidity condition. The lender is still negotiating a secured loan, which it plans to use to pay its bond maturity.

Credito Real’s dollar bonds were trading weaker with its 9.125% Perp down 0.9 points to 36.8.

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