BUSINESS : Fitch Affirms and Withdraws Grupo Famsa's Ratings

 

Fitch Ratings - Mexico City - 23 Dec 2020: Fitch Ratings has affirmed Grupo Famsa S.A.B. de C.V.'s Long-Term Local and Foreign Issuer Default Ratings (IDRs) at 'D' and Famsa's outstanding senior notes issuance at 'C'/'RR5'.

 In addition, Fitch has affirmed Famsa's Long-Term National Scale Rating at 'D(mex)' and the National Short-Term Rating at 'D(mex)'. Simultaneously, Fitch has withdrawn all Famsa's ratings.

Fitch has withdrawn Famsa's ratings for commercial reasons. Accordingly, the agency will no longer provide ratings or analytical coverage for Famsa.

International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions,

 measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario 

(defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. 

The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from

 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings,

Famsa has an Environmental, Social and Corporate Governance (ESG) Relevance Score of '5' for Management Strategy due to the number of operational restructures that have occurred due to challenges the company has faced in implementing its strategy.

Famsa has an ESG Relevance Score of '5' for Financial Transparency due to a record of material differences from audited financial statements and the company's reported figures.

Famsa has an ESG Relevance Score of '4' for Governance Structure due to board effectiveness and ownership concentration, which has an unfavorable effect on the credit profile and is relevant to the rating in conjunction with other factors.

Famsa has an ESG Relevance Score of '4' for Group Structure as that the company presents a below-average transparency of related-party transactions. This has a negative effect on the credit profile and is relevant to the rating in conjunction with other factors.

Except for the matters discussed above, the highest level of ESG Credit Relevance, if present, is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on our ESG Relevance Scores visit www.fitchratings.com/esg.

Following the withdrawal of the ratings for Grupo Famsa, Fitch will no longer be providing the associated ESG Relevance Scores.