Fitch: Latin America Corporate Outlooks Update - Mexican Corporates Slow but Steady
'Mexican corporates cash flows are projected to improve as lower inflation, unemployment rates and slightly better economic conditions are reflected in a gradual recovery in consumer demand for goods and services.' according to Rogelio Gonzalez, a Director at Fitch. 'A stable outlook trend is expected for the remainder of the year with no material rating changes in the portfolio of international scale rated issuers.'
Fitch-rated corporates' aggregate net leverage metric is projected to remain relatively stable during 2015 and continue to be positioned as one of the lowest compared with Latin American peers. Material deviations from historical levels will be mostly related to merger and acquisition activity.
Foreign exchange risk represents a concern for certain corporates but should be manageable for companies with operations outside of Mexico. The volatility in exchange rate of the peso/dollar is expected to continue in light of an imminent increase in U.S. interest rates and low oil prices.
Fitch's five Report Outlook series will be released one report per day as follows:
Aug. 17: Brazil Corporate Outlook Update -- Dark Days to Continue;
Aug. 18: Chile Corporate Outlook Update - Challenges Persist;
Aug. 19: Colombia Corporate Outlook Update - Resilient Credit Quality;
Aug. 20: Mexico Corporate Outlook Update - Slow but Steady;
Aug. 21: Peru Corporate Outlook Update -- Facing Hard Times.
The Mexican special report titled 'Slow but Steady' is available on the Fitch Ratings web site at www.fitchratings.com or by clicking on the link.