Fitch cuts American Latina Logistica

Fitch Ratings said it has downgraded the ratings for America Latina Logistica SA (ALL), including the local and foreign currency issuer default ratings (IDR) to B+ from BB-, the long-term national rating to BBB+(bra) from A-(bra) and the third, fourth and fifth debenture issuances to BBB+(bra) from A-(bra).

The ratings have also been removed from rating watch negative. The outlook for the local and foreign currency IDRs and long-term national ratings is stable.

These rating actions are the result of the increased debt to be assumed by ALL in the proposed R$1.4 billion acquisition of Brasil Ferrovias SA and its affiliate Novoeste Brasil SA, Fitch noted.

Payment will be made using ALL's common and preferred shares such that the transaction will result in no new debt issuances at the ALL holding company and operating subsidiary levels.

However, the acquisition of higher leveraged Brasil Ferrovias and Novoeste will significantly increase consolidated leverage and should negatively affect the overall credit quality of ALL, the agency added.

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