Fitch Ratings has upgraded Mexico’s Grupo Cementos de Chihuahua (GCC) local and foreign currency Issuer Default Ratings (IDRs) to 'BB-' from 'B+'. The Rating Outlook has been revised to Stable from Positive. Furthermore, Fitch has affirmed GCC's US$260 million senior secured notes due 2020 at 'BB-' and has withdrawn the 'RR3' Recovery Rating. This reflects the improvement in GCC’s performance and credit profile and takes into consideration the more promising outlook thanks to the strengthening US cement market.
GCC's ratings reflect the company's solid business position in the cement, ready mix and aggregates segments in the regions where it has a presence; diversified operations in Mexico and the US in the non-residential and residential sectors; as well as positive free cash flow generation through the recent industry cycle. The ratings are limited by the company's scale relative to industry peers' and by the cyclicality of the cement industry.
GCC is the largest cement producer in the state of Chihuahua across all product segments. It also has strong cement market positions in Colorado, New Mexico, North and South Dakota, and in the El Paso, TX, area.
Adapted from press release by Katherine Guenioui