jugeqa的部落格

(The following statement was released by the rating agency)
NEW YORK, September 10 (Fitch) Fitch Ratings has downgraded
Maestro Peru S.A.'s
(Maestro) ratings as follows:
--Foreign currency Issuer Default Rating (IDR) to 'B' from 'B+';
--Local currency IDR to 'B' from 'B+';
--Senior unsecured notes to 'B/RR4' from 'BB-/RR3'.
The Rating Outlook remains Negative.
The ratings downgrade reflects the deterioration in Maestro's
credit metrics.
The company's weak operational results and negative free cash
flow (FCF) trend
during the last 12-month period (LTM) ended June 30, 2014 has
resulted in
Maestro's total adjusted debt-to-EBITDAR consistently above 5x,
together with
low liquidity levels at June 30, 2014. The Negative Outlook
reflects credit
concerns regarding the company's capacity to reverse the
negative trend in
margins, leverage, and liquidity during the next 12-month.
The ratings incorporate Maestro's leading market position, high
leverage and low
liquidity. The ratings also consider the sensitivity of the
construction and
home improvements industry to economic cycles. The 'B/RR4'
rating of the
company's unsecured public debt reflects average recovery
prospects in the event
of a default.
KEY RATING DRIVERS
Low Liquidity:
Maestro's liquidity is viewed as weak considering its cash level
relative to its
short-term debt, declining interest coverage, and the FCF
generation trend. The
company's cash and equivalents were USD5.8 million while its
short-term debt was
USD16.4 million at June 30, 2014. Maestro's interest coverage
ratio, measured as
EBITDAR/(interest expenses plus rents), has declined reaching
2.5x, 1.8x, and
1.4x during 2012, 2013, and LTM June 2014, respectively. Maestro
generated cash
flow from operations (CFFO) of USD16.2 million during the LTM
ended June 30,
2014. FCF was negative USD5.8 million after capital expenditures
(capex) of
USD22 million. The FCF calculation considers CFFO minus capex.
The company has
adjusted down its 2014 capex plan, and no store openings are
scheduled during
this year. During 2015, Maestro plans to resume new openings but
it will depend
on the sales of non-core fixed assets.
Margins Decline:
During 2013 and LTM June 2014, the company's EBITDA margins
declined to 8.2% and
7.5%, respectively, from a stable 9% in 2011 and 2012. EBITDAR
margins which
considered rentals - USD8.3 million in LTM June 2014 and USD7.3
million in June
2013 - were 9.0% and 9.5%, respectively. Maestro's revenues of
USD543 million in
2013 increased 15.4% compared to 2012, but for LTM June 2014
remained around
USD544 million. Lower sales growth and higher operational
expenses as seven new
stores were opened during 2013 explained the margin reductions.
Due to the
economic slowdown and cannibalism from new stores, same store
sales (SSS) fell
2.9% during the first semester of 2014.
Adjusted Leverage Above Expectations:
Maestro's gross adjusted leverage, measured by total adjusted
debt divided by
EBITDAR, and net adjusted leverage ratios were 5.9x and 5.8x for
LTM June 2014,
respectively. This compared negatively with gross adjusted
leverage levels of
4.5x and 5.5x in December 2012 and December 2013, respectively.
The company's
total adjusted debt was approximately USD290 million at the end
of June 2014.
This debt includes USD232 million in on-balance-sheet debt,
mostly compounded by
the USD200 million unsecured notes issued in September 2012.
Total
off-balance-sheet debt of USD58 million is calculated by
adjusting by 7x the
company's rental payments of USD8.3 million during LTM June
2014.
Covenants Restrict Additional Indebtedness but Carveouts:
The company's USD200 million bond indenture considers a limit on
additional
indebtedness of a consolidated debt-to-consolidated EBITDA ratio
no greater than
4.5x prior to year two after issuance, 4x in year two and prior
to year three,
and 3.5x thereafter. The indenture also includes carveouts that
allow for
additional new debt - up to USD40 million - despite being above
the maximum
financial leverage covenant. As of June 2014 the company's
financial leverage
ratio was 5.3x, above the covenant maximum limit, and the
additional new debt
incurred was S/.51.8 million (USD20 million) below the maximum
allowed for
additional indebtedness (USD40 million).
Market Position Incorporated:
The ratings factor in Maestro's business position as a leading
local player in
the Peruvian retail home improvement sector. Maestro is one of
the two largest
modern home improvement retailers in Peru. The company has an
estimated market
share of 40% of the modern retail channel. Maestro maintains an
established and
recognized brand and is well positioned as a low-price
specialist. Maestro's
ratings positively consider the solid medium-term fundamentals
of Peru's home
improvement industry reflected in increasing purchasing power of
households and
the industry's low penetration.
RATING SENSITIVITIES
Negative Rating Action: A combination of the following would
result in a rating
downgrade: further deterioration of the company's gross adjusted
leverage and
interest coverage due to poor operational performance.
Positive Rating Action: A combination of the following would
result in revising
the Negative Outlook and affirming the ratings: stable
operational performance
reflecting improvement in SSS combined with a balance between
capex, liquidity
and capital structure resulting in the company's total gross
adjusted leverage
in the range of 5-5.5x and interest coverage in the range of
1.5x to 1.75x.
Contact:
Primary Analyst
Jose Vertiz
Director
+1-212-908-0641
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
Secondary Analyst
Josseline Jenssen
Director
+51-999-108-046
Committee Chairperson
Lucas Aristizabal
Senior Director
+1-312-368-3260
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908
0526, Email:
elizabeth.fogerty@fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (May 28, 2014).
Applicable Criteria and Related Research:
Corporate Rating Methodology - Including Short-Term Ratings and
Parent and
Subsidiary Linkage
here
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Solicitation Status
here
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