Nemak S.A.B. de C.V. Outlook Revised To Stable From Positive; 'BB+' Ratings Affirmed

Mexico-based auto components manufacturer Nemak maintains healthy key credit metrics, with debt to EBITDA below 2.0x and funds from operations (FFO) to debt above 40%, mainly due to strong top-line growth, especially from the U.S., and continued financial discipline that helps reduce debt. However, we're revising our outlook on Nemak to stable from positive in light of potential changes to the trade terms between Mexico and the U.S., which could alter the company's cost structure and volume sales to its key export market. Also, our outlook revision reflects our view that slower growth of U.S. light vehicles sales may signal a downward shift in the industry cycle, and could lead to the company's sluggish volume sales in the medium term.

...+ Mexico-based auto components manufacturer Nemak maintains healthy key credit metrics, with debt to EBITDA below 2.0x and funds from operations (FFO) to debt above 40%, mainly due to strong top-line growth, especially from the U.S., and continued financial discipline that helps reduce debt. + However, we're revising our outlook on Nemak to stable from positive in light of potential changes to the trade terms between Mexico and the U.S., which could alter the company's cost structure and volume sales to its key export market. + Also, our outlook revision reflects our view that slower growth of U.S. light vehicles sales may signal a downward shift in the industry cycle, and could lead to the company's sluggish volume sales in the medium term. + At the same time, we're affirming our '##+' global scale and 'mxAA-' national scale corporate credit ratings on Nemak. + The stable outlook reflects our expectation that the company's key credit metrics will remain in line with its current financial...

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