Fitch downgrades Falabella

Fitch Ratings said it downgraded Falabella SA's long-term foreign-, local-currency issuer default and senior unsecured ratings to BBB- from BBB. Fitch also lowered the national issuer and debt ratings to AA-(cl) from AA(cl).

“The downgrade reflects the company's high net leverage metrics expected in the next two years, which would be inconsistent with a BBB rating. In 2022, a materially lower EBITDA margin in Chile and significant working capital requirements resulted in weaker cash generation, increasing debt requirements. Fitch expects this trend to continue in 2023,” the agency said in a statement.

The outlook is negative.

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