Fitch: Peruvian Corporates Outlook Remains Negative

CHICAGO--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: 2016 Outlook: Peruvian Corporates (Facing Hard Times)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875231

Fitch Ratings has published a new report on the 2016 outlook for Peruvian Corporates.

Fitch expects downgrades and negative rating actions for Peruvian companies will continue during the next 12 months. The sluggish economy, low metal prices and the presidential elections could make 2016 more challenging for corporates.

'During the first half of 2016, consumer and investor confidence could continue to weaken until the new president is elected and takes office in July 2016,' according to Josseline Jenssen, Director at Fitch. 'GDP growth is expected to moderate to 3.8% in 2016, which does not take into account the potential negative impact of a severe El Nino in the first quarter of 2016,' added Jenssen.

Fitch does not expect significant increases in long-term debt for corporates as capex has been restricted, but a slower deleveraging process than previously anticipated is expected. Cash flow generation would be negatively affected by the slowdown in the economy, depreciation of the PEN, and external factors such as low metal prices and the El Nino phenomenon.

Fitch believes Peruvian corporates will reduce exposure to FX risk by exchanging U.S. dollar-denominated debt for local currency debt and maintain strong liquidity due to low refinancing risk and ample access to the local market.

The full report '2016 Outlook: Peruvian Corporates' is available at 'www.fitchratings.com' or by clicking on the link above.

Additional information is available on www.fitchratings.com

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151215006535/en/

Fitch Ratings
Joe Bormann, CFA
Managing Director
+1 312-368-3349
Fitch Ratings, Inc.
70 West Madison Street
Chicago, IL 60602
or
Josseline Jenssen
Director
+51 1 372 0681
or
Media Relations:
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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