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Bond Market News

Unifin Downgraded to B+ by S&P

Unifin Financiera S.A.B. de C.V.’s (Unifin) was downgraded to B+ from BB- by S&P on the back of “adverse financial and operating conditions” as investors’ confidence has fallen. Unifin’s perps were downgraded to CCC+ from B-. Given its short- and long-term funding needs, S&P believes that Unifin has limited capacity to raise funding sources in the next 12 months. This comes despite Unifin raising funds via alternative strategies like short-term unsecured notes, credit lines etc. S&P notes that these sources of funding could pressure its earnings capacity, maturity profile, and collateralization levels. This would thereby impact its funding profile and financial flexibility. As of end-2021, international market debt represented ~60% of Unifin’s funding base, with six outstanding bonds  totaling $2.2bn. S&P expects Unifin to substitute the above bonds with secured and unsecured issuances mainly in the Mexican local market.

Unifin’s dollar bonds were trading flat at 67-69 cents on the dollar. Its 8.875% Perp was at 43.25 cents on the dollar.

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