Fitch: 40 Percent of Latin American Corporates Downgraded in 2015 as Cash Flows Plummet
Key findings indicate that Latin America corporates faced several challenges during 2015 as cash flows plummeted as a result of weak commodity prices and devaluating currencies during a time where financing alternatives remained scarce. With the exception of corporates in the 'B' category, free cash flow was positive for the majority of issuers, as they scaled back capital expenditures and sliced dividends. As a result, debt levels were largely unchanged.
During 2015 close to 40% of Latin America corporates shifted down the rating scale as Fitch downgraded 77 of its 198 internationally rated Corporates. The downgrades were concentrated in Brazil, where 56 of the downgrades occurred. Most of the impact was seen in the 'BB' and single 'B' rating categories, which now represent 23% and 16% of the outstanding ratings.
The special report 'Latin America Comparative Statistics Book - 2016' is available on Fitch's web site 'www. fitchratings. com', or by clicking on the link. This report represents an ongoing effort by Fitch to provide investors with tools and key detailed company profile information in order to make insightful credit judgments in a region with diverse risks.
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