New York, April 20, 2020 -- Moody's Investors Service, ("Moody's") has
changed the outlook to negative from stable and affirmed the ratings on
some non-financial companies operating in Mexico. The rating
actions follow the downgrade of the Government of Mexico's ratings to
Baa1 from A3 and the maintenance of a negative outlook, on 17 April
2020. For more information, please see "Moody's downgrades
Mexico's ratings to Baa1; maintains negative outlook" available
ISSUERS AND RATINGS AFFIRMED, NEGATIVE OUTLOOK
America Movil, S.A.B. de C.V.
(America Movil)'s global scale senior unsecured and gtd senior unsecured
ratings were affirmed at A3, its senior unsecured shelf and gtd
senior unsecured MTN program ratings at (P)A3 and its junior subordinate
ratings at Baa2. The outlook was changed to negative from stable.
Grupo Televisa, S.A.B. (Televisa)'s global
scale senior unsecured ratings were affirmed at Baa1 and its senior unsecured
shelf rating at (P)Baa1. The outlook was changed to negative from
Coca-Cola Femsa, S.A.B. de C.V.
(KOF)'s global scale gtd senior unsecured ratings were affirmed
at A2. The outlook was changed to negative from stable.
The changes in outlook to negative for these companies follow the downgrade
of the Government of Mexico's ratings to Baa1 from A3 with the outlook
remaining negative, on 17 April 2020, and reflects the link
to the Mexican sovereign. Moody's believes that a weaker sovereign
has the potential to create a rating drag on companies operating within
its borders, and therefore it is appropriate to limit the extent
to which these issuers can be rated higher than the sovereign, in
line with Moody's cross-sector rating methodology "Assessing the
Impact of Sovereign Credit Quality on Other Ratings" published in June
2019, and available on www.moodys.com.
The rating affirmations are supported by each issuer's fundamentals,
which are either as strong as or stronger than those of the sovereign,
and the generally low default dependence of these companies with the sovereign.
Some of these companies' ratings are above Mexico's sovereign rating,
a situation that only occurs under exceptional circumstances, when
an issuer's fundamentals are stronger than those of the sovereign,
and that also reflects their geographic diversification, with a
large proportion of their revenue and assets outside of their domestic
market. More specifically, KOF's ratings benefit from a one-notch
uplift because of its key role in the Coke system and the resulting expectation
that The Coca-Cola Company (A1 stable) would likely seek to bolster
KOF's financial condition if it were to weaken significantly.
Moody's decision to downgrade the Government of Mexico's ratings to Baa1
reflects the following key drivers: (1) Mexico's medium term economic
growth prospects have materially weakened; (2) the continued deterioration
in Pemex's financial and operational standing is eroding the sovereign's
fiscal strength, which is already pressured by slower revenue growth
due to a weaker economy; (3) weakened policymaking and institutional
capacity. The negative outlook reflects the risk that economic
and fiscal strength deteriorate beyond what is captured in a Baa1 rating
due to ongoing uncertainties related to policy direction in the medium
term and policy responses that have been insufficient to effectively address
both the country's economic challenges and Pemex's continued financial
and operating problems.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given that the outlook for Mexico's sovereign rating is negative,
an upgrade of these companies' ratings is unlikely. Moody's
could stabilize the outlook of these companies, if the outlook on
the sovereign is stabilized and if they maintain their current credit
The ratings of these companies could be downgraded, if the rating
of the sovereign is downgraded. The ratings of these companies
could also be downgraded if their credit profile weakens.
The principal methodology used in rating America Movil, S.A.B.
de C.V. was Telecommunications Service Providers published
in January 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1055812.
The principal methodology used in rating Grupo Televisa, S.A.B.
was Pay TV published in December 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1134554.
The principal methodology used in rating Coca-Cola FEMSA,
S.A.B. de C.V. was Global Soft Beverage
Industry published in January 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1053179.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of these methodologies.
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
The below contact information is provided for information purposes only.
Please see the ratings tab of the issuer page at www.moodys.com,
for each of the ratings covered, Moody's disclosures on the
lead rating analyst and the Moody's legal entity that has issued
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Senior Vice President
Corporate Finance Group
Moody's de Mexico S.A. de C.V
Ave. Paseo de las Palmas
No. 405 - 502
Col. Lomas de Chapultepec
Mexico, DF 11000
JOURNALISTS: 1 888 779 5833
Client Service: 1 212 553 1653
Marianna Waltz, CFA
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 0 800 891 2518
Client Service: 1 212 553 1653
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653