Fitch cuts Alpha Holding to CC

Fitch Ratings said it downgraded Alpha Holding SA de CV’s long-term local- and foreign-currency issuer default ratings to CC from B. Fitch also lowered Alpha Holding's senior unsecured notes to CC/RR4 from B/RR4.

The downgrades follow the company's Tuesday announcement on relevant accounting errors, the agency said.

Alpha said it 2018, 2019 and quarterly financial statements for 2020 and any earnings releases for those periods should no longer be relied on.

“As per Fitch's rating definitions, the CC rating primarily reflects that default appears probable due to a heightened likelihood of an early call on bond payment if financial statements are not published on time in accordance to its current covenant, and it also incorporates Fitch's concerns on the entity's ability to rebuild its capital metrics after the announced restatements as it currently appears to be insolvent due to the size of the error disclosed and the materiality of the potential impairment on the entity's capital position, while also considering the increased funding and liquidity risks,” Fitch said in a press release.

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