Research Update: Mexican Auto Supplier Nemak Outlook Revised To Stable From Negative On Continued Financial Recovery, Ratings Affirmed

Mexico-based auto supplier Nemak S.A.B. de C.V. has remained financially resilient to the negative effects of the Covid-19 pandemic, posting EBITDA about 8.0% higher than we expected for 2020. Risk prevention strategies also allowed the company to maintain a strong liquidity position, which we expect to continue for the next 24 months. Higher-than-expected production volumes and operating cash flows allowed Nemak's leverage metrics to improve, with debt to EBITDA of about 2.0x on an annualized basis as of March 31, 2021. This compares positively with our expectations for the company's 2021 recovery. As a result, on May 12, 2021, S&P Global Ratings revised the outlook on Nemak to stable from negative and affirmed the long-term global scale 'BB+' and national

...- Mexico-based auto supplier Nemak S.A.B. de C.V. has remained financially resilient to the negative effects of the Covid-19 pandemic, posting EBITDA about 8.0% higher than we expected for 2020. Risk prevention strategies also allowed the company to maintain a strong liquidity position, which we expect to continue for the next 24 months. - Higher-than-expected production volumes and operating cash flows allowed Nemak's leverage metrics to improve, with debt to EBITDA of about 2.0x on an annualized basis as of March 31, 2021. This compares positively with our expectations for the company's 2021 recovery. - As a result, on May 12, 2021, S&P Global Ratings revised the outlook on Nemak to stable from negative and affirmed the long-term global scale '##+' and national scale 'mxAA-' issuer credit ratings. - At the same time, we affirmed our global scale '##+' issue-level rating on Nemak's senior unsecured notes due 2024 and 2025. The recovery rating remains '3' (55%). - The stable outlook reflects...

Research Update