Fitch Ratings has downgraded
The National Scale Long-Term and Short-Term Ratings have also been downgraded to 'C(mex)' and 'C(mex)' from 'A-(mex)' and 'F2(mex)', respectively. In addition, Fitch has downgraded the ratings of the company's senior notes and hybrid securities to 'C' and 'C', respectively. A full list of rating actions is at the end of this commentary.
Key Rating Drivers
The downgrades follow
Fitch believes these developments constitute that a default process has begun. The company's next global bond maturity is
Prior to the announcement,
Fitch believes
SENIOR DEBT
The senior global debt rating is equalized with
HYBRID SECURITIES
Fitch has revised
RATING SENSITIVITIES
Fitch will monitor the sufficiency of information for the ongoing evaluation of the entity's creditworthiness, which could result in a rating withdrawal at the current level if the entity does not disclose sufficient information to Fitch and the market.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
The IDRs would be downgraded to 'RD' if the company enters to a debt restructuring process or distressed debt exchange on a bond, loan or other material financial obligation;
The IDRs would be downgraded to 'RD' in the event of a missed interest or principal payment, after the expiration of the applicable grace period;
The IDRs would be downgraded to 'D' if the entity enters into bankruptcy proceedings, administration, receivership, liquidation or other formal winding-up procedures or if it ceases operations.
Factors that could, individually or collectively, lead to positive rating action/upgrade:
Although highly unlikely, an upgrade could potentially occur if the company abandons its current intention to cease interest and principal payment of its financial liabilities. Otherwise, upside potential is limited due to current uncertainties;
In the event a debt restructuring process is initiated and sufficient disclosure of the company's plans and financial information is provided, the IDRs and national scale ratings would be reassessed.
Best/Worst Case Rating Scenario
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Summary of Financial Adjustments
Fitch reclassified pre-paid expenses as intangibles and deducted from total equity due to low loss absorption capacity under stress.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Fitch has revised
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.
RATING ACTIONS
Entity / Debt
Rating
Prior
Unifin Financiera, S. A. B. de C. V.
LT IDR
C
Downgrade
BB-
ST IDR
C
Downgrade
B
LC LT IDR
C
Downgrade
BB-
LC ST IDR
C
Downgrade
B
Natl LT
C(mex)
Downgrade
A-(mex)
Natl ST
C(mex)
Downgrade
F2(mex)
senior unsecured
LT
C
Downgrade
BB-
subordinated
LT
C
Downgrade
B
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