Camargo Correa Rating Lowered on Cimpor

Fitch has downgraded the credit rating of Brazil’s Camargo Correa to BB minus from BB+, it says. The action follows Camargo’s of 39.96% of Cimpor for EUR1.5bn ($1.9bn), bringing its ownership to 73%, resulting in leverage which Fitch considers negative to credit quality. “Camargo’s capital structure was already under pressure from high leverage and poor operational performance in the company’s engineering and construction businesses, and this transaction will not allow the company to deleverage to the degree that was previously anticipated ,” the agency says. With the debt taken on to finance the acquisition, Fitch sees net leverage at 4.6x. Fitch expects Camargo to keep it at around 4.5x during the near to medium-term, while keeping adequate liquidity. The outlook is stable.