...NAFTA Resolution Vital: Nemak exhibits investment-grade characteristics due to increasing product and geographic diversification and an improving financial structure. The outcome of the North American Free Trade Agreement (NAFTA) renegotiations will resolve Nemak's Positive Outlook with a ratings upgrade under a scenario of NAFTA continuation, and/or modernization, and cosmetic enhancements to the agreement. Termination of NAFTA could result in a stabilization of the company's `BB+' ratings as it could lead to lower industry profitability. If the termination led to a broader global trade war, it is likely that Nemak's ratings would be downgraded. Large Exposure to North America: Nemak derives around 60% of its EBITDA from North America, mainly due to the sale of components used in the assembly of vehicles sold in the U.S. This underscores the importance of the NAFTA trading framework to the company and the complex integrated supply chains established over the last two and a half decades....
