Fitch downgrades Gruma, maintains stable outlook

by Eric Schroeder
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MONTERREY, MEXICO — Fitch Ratings on April 2 downgraded several ratings for Gruma S.A.B. de C.V., lowering the company’s foreign currency long-term issuer default rating to B+ from B++ and its $300 million perpetual bonds to BB-/RR3 from BB+. The ratings agency maintained its stable outlook. "The rating downgrade reflects the leveraging impact on Gruma’s capital structure that will result from the termination of Gruma’s foreign exchange derivative positions and the subsequent conversion of the realized losses into debt," Fitch noted. Fitch said Gruma has closed approximately 87% of its foreign exchange derivative instrument positions with its three main counterparties, resulting in a realized loss of $668.3 million. The company now has 120 days to negotiate with the counterparties on the conversion of the $668.3 million into a term loan.

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