...Multiple Steps Needed to Reduce Leverage: A combination of several factors that drive Cencosud S.A.'s (Cencosud) gross adjusted leverage below 3.5x would result in revising the Rating Outlook of Negative to Stable. Of the various scenario analyses performed by Fitch Ratings, the one that most easily led to this ratio by 2016 was revenue growth of 9% per year, capex of less than USD600 million per year, flat working capital requirements and a growth in EBITDAR margins to 9.25% from 8.5%. A Stable Outlook is also contingent upon adequate liquidity reflected in low levels of short-term debt and a manageable debt amortization schedule. JV Execution to Lower Debt: Fitch expects proceeds from the execution of the joint venture (JV) transaction with Banco of Nova Scotia (Scotiabank), which involves selling 51% of Cencosud's Chilean credit card and banking operations, to be used to reduce debt levels. Assuming the company uses 100% of the transaction proceeds, estimated in USD1.2 billion or CLP729.4...
