Research Update: Mexican Cement Producer Fortaleza 'BB-' Rating Affirmed And Off CreditWatch Negative On Share Buyback, Outlook Stable

Mexico-based cement producer, Fortaleza Materiales, S.A.B. de C.V. (Fortaleza) recently acquired most of its free-floating shares and will subsequently delist them from the Mexican Stock Exchange. The company mostly funded the transaction through a MXN2 billion syndicated loan with a three-year tenor. We expect a moderate short-term impact on Fortaleza's credit metrics, with adjusted leverage ratio slightly above 3.0x in 2022 due to the incremental debt for the transaction and expansionary capital expenditures (capex). However, we expect a quick deleveraging to 2.0x-2.5x in 2023 due to steady results and solid cash flows. On April 26, 2022, S&P Global Ratings affirmed its 'BB-' issuer credit rating and removed it from CreditWatch, where we placed it with negative implications on Nov. 11,

...- Mexico-based cement producer, Fortaleza Materiales, S.A.B. de C.V. (Fortaleza) recently acquired most of its free-floating shares and will subsequently delist them from the Mexican Stock Exchange. The company mostly funded the transaction through a MXN2 billion syndicated loan with a three-year tenor. - We expect a moderate short-term impact on Fortaleza's credit metrics, with adjusted leverage ratio slightly above 3.0x in 2022 due to the incremental debt for the transaction and expansionary capital expenditures (capex). However, we expect a quick deleveraging to 2.0x-2.5x in 2023 due to steady results and solid cash flows. - On April 26, 2022, S&P Global Ratings affirmed its '##-' issuer credit rating and removed it from CreditWatch, where we placed it with negative implications on Nov. 11, 2021. - The stable outlook on Fortaleza reflects our expectation that it should continue to deliver steady results and to fund its capex with internal cash flows. This should result in adjusted leverage...

Research Update