Moody's eyes Caja Los Andes for trim

Moody's Investors Service said it placed the Baa3 long-term local- and foreign-currency issuer ratings of Caja Los Andes on review for downgrade. The outlook was changed to ratings under review from negative.

“Today's rating action reflects the fall of Caja Los Andes' profitability metrics since 2022 amid higher interest rates as well as the company's high reliance on short-term debt funding relative to its holdings of liquid assets.

“An important credit challenge for Caja Los Andes is its structural exposure to confidence-sensitive and concentrated funding, with short-term debt accounting for around 40% of total funding as of March 2023, and low holdings of liquid assets at around 30% of short-term maturities, which increases the vulnerability of the company's financial profile, particularly in times of market volatility.

“Nevertheless, the company has been working on reducing its short-term exposures through funding diversification at longer tenors. In May, the company issued a three-year bond for $112 million (CLF 2.5 million) and is seeking to obtain its first international bank financing with a three-year maturity,” Moody’s said in a press release.

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