Fitch slices Atento

Fitch Ratings said it downgraded Atento Luxco 1 SA's $500 million of senior secured notes due 2026 to B-/RR4 from B+/RR4 and its long-term foreign-currency issuer default rating to B- from B+.

The agency also lowered Atento Brasil SA's long-term national scale rating to B(bra) from A-(bra). All these ratings have been placed on rating watch negative.

“The downgrades and negative watch reflect elevated uncertainty about Atento's ability to generate sufficient cash flow to service its debt and derivative obligations due to the rapid increase in interest rates by the U.S. Federal Reserve Bank, which will make it more difficult for Brazil to lower interest rates in the near-term despite a decline in inflation rates in that country.

“Atento has several derivatives that are tied to Brazil's CDI rates. These actions also take into consideration the deteriorating economic outlook for the company's main markets in 2023 that will result in lower-than-previously-expected volumes,” Fitch said in a press release.

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