Research Update: Alpek Outlook Revised To Positive From Stable, On Stronger Credit Metrics, 'BB+' Ratings Affirmed

Thanks to healthy volume sales for the packaging, food and beverage industries that have offset the lower revenue from the polyester division, Mexico-based petrochemicals producer Alpek S.A.B. de C.V. posted better-than-expected financial results. For the 12 months ended March 31, 2021, the company's leverage metric was about 1.9x, significantly lower than our previous expectations of 2.7x. In our view, improved demand fundamentals and high petrochemical prices will carry into the next 12-18 months and support Alpek's top-line growth and profitability. On April 22, 2021, S&P Global Ratings revised its outlook on Alpek to positive from stable. We also affirmed our 'BB+' global scale issuer credit and issue-level ratings on Alpek. At the same time, we maintained a recovery rating of

...- Thanks to healthy volume sales for the packaging, food and beverage industries that have offset the lower revenue from the polyester division, Mexico-based petrochemicals producer Alpek S.A.B. de C.V. posted better-than-expected financial results. - For the 12 months ended March 31, 2021, the company's leverage metric was about 1.9x, significantly lower than our previous expectations of 2.7x. - In our view, improved demand fundamentals and high petrochemical prices will carry into the next 12-18 months and support Alpek's top-line growth and profitability. - On April 22, 2021, S&P Global Ratings revised its outlook on Alpek to positive from stable. We also affirmed our '##+' global scale issuer credit and issue-level ratings on Alpek. At the same time, we maintained a recovery rating of '3' on the company's senior unsecured notes, indicating our expectation of a meaningful recovery (50-90%) for lenders in the event of a default. - The positive outlook reflects our expectation that Alpek...

Research Update