S&P cuts Alpha Holding

S&P said it downgraded Alpha Holding SA de CV and its issue-level ratings to CCC from B and B-, respectively. The agency also placed the ratings on CreditWatch with negative implications.

“In our opinion, the recent announcement related to accounting errors reflects governance deficiencies that would be harmful to Alpha. On April 20, 2021, Alpha announced a restatement to its financial statements for 2018, 2019, and 2020 quarterly results, based on accounting errors. The latter could potentially affect its derivative positions, reserve coverage, account receivables, and capital expenses amortization. In our opinion, we consider the company's internal control environment as deficient based on available evidence, such as past restatements on their financial statements, and the current ones,” S&P said in a press release.

The reported accounting errors and financial restatements could seriously hurt the company's capitalization metrics, the agency said.

S&P said the CreditWatch indicates a one-in-two chance it could lower Alpha’s ratings in the next 90 days.

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