Fitch downgrades Metrofinanciera

Fitch Ratings said it downgraded Metrofinanciera SA de CV's foreign- and local-currency long-term issuer default ratings to B+ from BB-, $100 million 10¼% perpetual non-cumulative subordinated step-up notes to B-/RR6 from B, long-term national-scale issuer rating to BBB(mex) from A-(mex) and short-term national-scale issuer rating, including the company's commercial paper, to F3(mex) from F2(mex).

The agency affirmed the company's foreign- and local-currency short-term issuer default ratings at B, its individual rating at D and the support rating at 5.

The outlook is stable.

The downgrade reflects the company's weaker financial condition, given a downward trend in asset quality, liquidity, capital adequacy and profitability, Fitch said. Metrofinanciera's ratings also factor in an increased business risk, as the company maintains aggressive growth rates while expanding into riskier lines, such as the land bank project.

The agency said refinancing risk is also an important contingency for Metrofinanciera, given its ample reliance on commercial paper to finance its bridge loans portfolio, a large portion of which is maturing within the next three months.

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