...- Mexican building materials company, Elementia S.A.B. de C.V., recently announced it intends to spin off its metal and building system divisions into a new independent company. - On April 8, 2019, S&P Global Ratings placed its '##' long-term issuer and issue-level credit ratings on Elementia on CreditWatch with negative implications. - The CreditWatch listing reflects the potential worsening of Elementia's business profile post spin-off, due to its concentration in a single business segment and smaller scale. - Moreover, Elementia's new capital structure and liquidity after the spin-off is somewhat uncertain because of potential cross-guarantees on its debt. Therefore, the company could face weaker leverage metrics under the announced spin-off. The transaction is still subject to shareholder approval, local regulation, and creditors' consent. - We plan to resolve the CreditWatch listing once we have more certainty about the strategic reorganization or after the completion of the spin-off,...
