Fitch cuts Credivalores

Fitch Ratings said it downgraded Credivalores-Crediservicios SA's long-term foreign-currency issuer default rating to B- from B and the senior debt to B-/RR4 from B/RR4. Fitch assigned a long-term local-currency IDR of B-.

Fitch said it also lowered Credivalores' long-term national scale ratings to BBB-(col) from A-(col) with a negative outlook. The agency concurrently cut the company's partial credit guarantee local issuance national rating to A(col) from AA(col) keeping the four notches relativity above Credivalores' long-term national scale rating.

“The downgrade reflects the materialization of Credivalores' ratings sensitivity regarding pre-tax income to average assets due to the net losses suffered in 2022 and the material breach of the tangible leverage sensitivity, which reflects a very low loss absorption capacity and a structural deterioration. These metrics had been under pressure for the rating level for several years due to almost null profitability and high appetite for growth,” Fitch said in a statement.

The outlook is negative.

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