S&P puts Alfa on watch

S&P said it placed its ratings for Alfa SAB de CV, Sigma Alimentos SA de CV and Alpek SAB de CV on CreditWatch with negative implications. Sigma and Alpek are units of Alfa.

The placements follow Alfa’s announcement it plans to spin off Nemak SAB de CV into a stand-alone publicly traded company, S&P said. S&P put Nemak’s ratings on watch, too.

“The CreditWatch listing reflects the risk that we could downgrade Alfa if the plan to spin off Nemak is completed and the company is unable to incorporate sufficient credit protection measures that fully compensate for the loss of portfolio diversification. In addition, Alfa’s financial risk profile is already under pressure due to weak economic and business conditions in the markets where it participates, related to Covid-19,” S&P said in a press release.

The agency said it aims to resolve the negative watch within 90 days once it has more information on Alfa’s new structure, objectives and the implications of the spinoff for Alfa’s credit risk profile.

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